Market rattles! Rs 8 lakh crore wiped out as Sensex, Nifty fall over 1%

Indian equity markets extended losses for the fourth consecutive session on Thursday, with investor wealth eroding by nearly Rs 8 lakh crore, as mounting concerns over US tariffs, relentless foreign fund outflows and weak global cues triggered broad-based selling.

The Sensex slumped 780.18 points (0.92%) to close at 84,180.96, while the Nifty 50 fell 263.90 points (1.01%) to 25,876.85, slipping below its 50-day moving average. The benchmarks are set to record their worst single-day decline in over four months, amid heightened volatility.

All sectoral indices ended in the red, with metals and oil & gas stocks leading the losses.

What dragged markets lower?

1) FII selling intensifies:

Foreign institutional investors sold equities worth Rs 1,527.71 crore on Wednesday, marking the third straight session of net selling. FIIs have already pulled out around Rs 5,760 crore in January, following record outflows in 2025.

2) US tariff concerns:

Markets reacted sharply after US President Donald Trump warned of higher tariffs on Indian goods, citing India’s continued purchases of Russian crude oil. The US has already imposed tariffs of up to 50 percent on select Indian products, with half of those penalties linked to Russian oil imports.

Export-oriented stocks, particularly textiles and shrimp exporters, came under heavy pressure after Trump backed a bipartisan US sanctions bill proposing tariffs of up to 500 percent on countries doing business with Russia.

3) Weak global cues:

Asian markets traded lower, with Japan’s Nikkei 225 and Hong Kong’s Hang Seng ending in the red, while US markets closed mostly lower overnight.

“Geopolitics and global trade have cast a shadow of chronic risk aversion for equity markets,” analysts at Motilal Oswal Financial Services told Reuters, adding that clarity on the long-pending India–US trade deal could act as a key trigger for a market rebound.

4) Weekly expiry volatility:

Thursday’s weekly Sensex derivatives expiry added to market volatility as traders unwound and rolled over positions.

5) Rising crude prices:

Brent crude rose 0.4 percent to $60.20 per barrel, a negative for India, which depends heavily on oil imports.

6) Spike in volatility:

The India VIX, the market’s fear gauge, surged nearly 9 percent to 10.83, signalling rising investor anxiety.

7) Profit booking in metals:

Metal stocks fell for the second straight session after a strong six-day rally, as prices of copper, aluminium, gold and silver cooled from elevated levels.

Stock-specific action

Tata Consultancy Services, Hindalco Industries and JSW Steel were among the top Nifty losers, falling up to 2 percent. Meanwhile, Eternal and Adani Ports and SEZ bucked the trend, gaining up to 1 percent.

Market breadth remained weak, with 2,709 shares declining, 964 advancing, and 158 ending unchanged.

Technical outlook

Despite the near-term pressure, analysts remain cautiously optimistic.

“While short-term softness persists, the broader positional trend remains bullish, supported by higher tops and higher bottoms on daily charts,” said Devarsh Vakil, Head of Prime Research at HDFC Securities.

He added that 26,373 will act as immediate resistance for the Nifty, while 26,000 is expected to provide strong near-term support.