Domestic benchmark indices continued their freefall for second striaght session on Tuesday as Nifty 50 and Sensex both declined 0.44 per cent and 0.52
per cent respectively. Both indices have fallen over 2.5 per cent in a month. Markets have been trailing lower due to multiple reasons, including trade deal uncertainty between the US and India. Continuous FII selling in the domestic market and a newly flared trade tensions between the US and Europe over US's push to take over Greenland. Markets have also turned volatile as India Inc started reproted its third quarter earnings for financial year 2026. The Nifty 50 opened 0.02 per cent lower at 25,580.30 and Sensex opened 0.05 per cent down at 83,207.38. The indices thereafter came under pressure with NSE Nifty 50 falling over 100 points meanwhile BSE Sensex also fell over 250 points. On NSE, 13 of the 15 sectors were in the red. Nifty Realty and Nifty IT lead the decline, while Nifty Metal and Nifty PSU Bank were the only sectors in green. Broader markets were trading lower, with the NSE Midcap 150 trading 0.80% lower and NSE Smallcap was trading 0.82% higher. The Nifty 50 index recorded a total market capitalisation of Rs 463.40 lakh crore Market breadth remained sharply negative, with only 628 of the 2,948 traded stocks advancing, while 2,229 declined and 91 ended unchanged as of 10:32 AM on January 20, 2026. Consequently, Rupee weakend past the 91 level for the first time since December 17.
Global Cues: Tariff threat
US President Donald Trump, over the weekend, said that he would charge an import tax of 10 per cent starting in February on goods from eight European countries because of their opposition to America's control of Greenland.
In a post on Truth Social, Trump said that Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland would face the tariff, which would climb to 25 percent on June 1 if a deal is not in place for 'the Complete and Total purchase of Greenland' by the United States. Trump claimed the move is necessary for national security, citing China's and Russia's interest in the territory.
FIIs Selling
Foreign portfolio investors continued their heavy selling streak, pulling out Rs 3,262.82 crore from Indian equities on January 19, 2026, as per exchange data. FPI sell orders worth Rs 15,642.57 crore far exceeded their purchases of Rs 12,379.75 crore, marking a sharp net outflow that has added to the sustained pressure on the markets.
In contrast, domestic institutional investors stepped in as stabilising buyers, recording a strong net inflow of Rs 4,234.30 crore on the same day, with total purchases of Rs 17,887.61 crore against sales of Rs 13,653.31 crore. The persistent FPI withdrawal amid global uncertainty has been a key factor amplifying volatility and deepening the recent market decline.
Trade Deal Uncertanity
Another factor weighing on the market is the long‑pending trade agreement between India and the United States, which remains unresolved, even after six rounds of negotiations since March.
The Trump administration has imposed tariffs of up to 50 per cent on Indian goods, including 25 per cent on India's purchases of Russian oil, among the highest levied on any country. India condemned these measures as "unfair, unjustified, and unreasonable."
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
