Markets Slip 1%: US Tariff Concerns, FII Selling Drag Sensex and Nifty

Sensex and Nifty extended their losing streak to a fourth session, with sharp intraday swings and broad selling as rising US tariff risks, heavy foreign investor outflows and higher crude prices pressured Indian equities, leaving major indices on track for their steepest single-day fall since 26 August 2025.

By the close, the Sensex slipped 780.18 points, or 0.92 percent, to 84,180.96, while the Nifty fell 263.90 points, or 1.01 percent, to 25,876.85, breaking below its 50-day moving average as every sector index ended lower, led by weakness in metals and oil and gas shares.

Sensex and Nifty hit by tariffs, trade deal worries and sector moves

Export-focused textile and shrimp counters dropped sharply after US President Donald Trump backed a bipartisan sanctions bill proposing tariffs of up to 500 percent on countries that continue trade with Russia, adding to concerns after earlier warnings of higher duties on Indian goods linked to Russian crude imports.

The Nifty 50 index has now shed 0.7 percent across the last three sessions, while the Sensex has slipped 0.9 percent in that period, as investors weighed Washington’s existing tariffs of up to 50 percent on selected Indian products, with roughly half those duties associated with India’s Russian oil purchases.

Sensex and Nifty react to FII selling, India Vix jump and stock moves

Foreign institutional investors sold equities worth Rs 1,527.71 crore on Wednesday, marking a third straight session of net selling after a brief pause on 2 January, when FIIs were small buyers worth Rs 289.80 crore, taking total January outflows to about Rs 5,760 crore after record withdrawals in 2025.

Market breadth stayed weak, with 964 stocks rising against 2,709 declining and 158 unchanged, while within the Nifty 50 basket, Tata Consultancy Services, Hindalco Industries and JSW Steel fell as much as 2 percent, but ETERNAL and Adani Ports and Special Economic Zone managed gains of up to 1 percent.

Sensex and Nifty under pressure from global cues, India Vix and crude prices

Traders also pointed to Thursday’s weekly derivatives expiry on Sensex-linked contracts, which often triggers position unwinding or rollovers, boosting volumes and volatility, while the India Vix fear index jumped nearly 9 percent to 10.83, signalling rising uncertainty and hedging demand among investors.

Overseas cues stayed weak, with Japan’s Nikkei 225 and Hong Kong’s Hang Seng indices in negative territory and US markets ending mostly lower on Wednesday, as Brent crude, the global benchmark, rose 0.4 percent to USD 60.20 per barrel, a concern for India given its heavy dependence on imported oil.

"Geopolitics and global trade have cast a shadow of chronic risk aversion for equity markets," analysts led by Abhishek Saraf of Motilal Oswal Financial Services told Reuters, adding that the conclusion of the long-pending India-US bilateral trade deal would be a key catalyst for an upside move.

"This bill would give President Trump tremendous leverage against countries like China, India, and Brazil to incentivise them to stop buying the cheap Russian oil that provides the financing for Putin's bloodbath against Ukraine," Aljazeera quoted Lindsey Graham, a senator for the US state of South Carolina as saying.

"The much-awaited US-India trade deal, which is critical for India's sustained growth and macro-economic stability, is not happening. This and the continuing FII selling are impacting the market," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, linking sentiment to both diplomatic delays and persistent foreign outflows.

Metal stocks fell for the second day after a six-session uptrend, as investors likely booked profits following strong rallies in copper, aluminium, gold and silver, while technical charts still show a constructive medium-term structure, despite the current pullback and near-term pressure on Sensex and Nifty.

Devarsh Vakil, Head of Prime Research at HDFC Securities, said that despite the short-term softness, the broader positional trend remains bullish, supported by a pattern of higher tops and higher bottoms on daily charts."On the upside, the recent swing high at 26,373 is likely to act as an immediate resistance level, while 26,000 is expected to provide strong near-term support," he said.

With tariffs, FII selling, volatile global markets and a higher India Vix all weighing on risk appetite, traders are watching negotiations on the US-India trade deal, movements in crude prices and technical support zones closely, as these factors could decide whether Sensex and Nifty stabilise or extend their recent losing run.