Why Is Indian Stock Market FallingToday? Indian equities traded lower on Monday, with benchmark indices weighed down by renewed concerns over a potential escalation in global trade tensions and a mixed
set of earnings from heavyweight companies.
The BSE Sensex was hovering near the 82,950 mark, down 620 points or 0.74 per cent, while the Nifty50 slipped 187 points, or 0.73 per cent, to 25,507. On the 30-share Sensex, ICICI Bank, Reliance Industries, Mahindra & Mahindra, Bharti Airtel and Sun Pharma emerged as the biggest drags, with losses ranging between 1 per cent and 3 per cent.
Key factors behind the market decline
1) Weak Q3 earnings:
The Nifty IT index declined 1 per cent, led by Wipro, which dropped 7.2 per cent after the company reported a 7 per cent year-on-year fall in Q3 consolidated profit to Rs 3,119 crore. Wipro’s Q4 guidance of 0–2 per cent quarter-on-quarter constant currency growth also missed expectations, pointing to continued demand softness, fewer working days and delays in deal ramp-ups.
Reliance Industries (RIL) fell 2.2 per cent despite posting a 1.6 per cent year-on-year rise in consolidated net profit to Rs 22,290 crore for Q3FY26. The company’s revenue increased 10 per cent to Rs 2.93 trillion, Ebitda rose 6.1 per cent to Rs 50,932 crore, while margins narrowed to 17.3 per cent from 18 per cent a year ago.
ICICI Bank shares declined 3 per cent following in-line Q3FY26 results. The lender’s profit fell 4 per cent year-on-year to Rs 11,317.9 crore as provisions more than doubled to Rs 2,555.6 crore.
HDFC Bank, however, slipped only 0.3 per cent after reporting an 11.5 per cent year-on-year rise in Q3 standalone profit to Rs 18,653.8 crore, with net interest income increasing 6.4 per cent to Rs 32,615 crore.
2) Negative global cues:
Global markets remained volatile after US President Donald Trump threatened to impose tariffs on eight European nations unless the US is allowed to acquire Greenland, injecting fresh uncertainty into trade relations. Trump said he would levy an additional 10 per cent import tariff from February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain, which would rise to 25 per cent from June 1 if no agreement is reached.
In Europe, EUROSTOXX 50 futures and DAX futures both slipped 1.1 per cent, while Japan’s Nikkei fell 1 per cent as risk-off sentiment prevailed. US markets are closed on Monday for Martin Luther King Jr. Day, leading to a delayed reaction on Wall Street, though US stock futures were down 0.7 per cent in early Asian trade.
The dollar weakened broadly, lifting safe-haven currencies such as the yen and the Swiss franc. Bitcoin, often seen as a proxy for risk appetite, dropped nearly 3 per cent to $92,602.64.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said volatility is likely to persist in the near term. “It’s going to be volatile days ahead in the near-term for stock markets globally with big geopolitical and geoeconomic developments impacting markets. We don’t know now how President Trump’s disruptive policies are going to impact international trade and global economic growth. How the European nations are going to react to President Trump’s latest Greenland tariffs remains to be seen. If Trump walks his talk and imposes 10 per cent tariffs on the eight European countries on February 1 and follows it up by raising the tariffs to 25 per cent from June 1 onwards, retaliation by the European bloc is almost certain. In such a scenario a trade war will breakout impacting global trade and growth. The likely impact of such a development on the market will be negative. It is also likely that Trump chickens out as has happened in the past,” he said.
3) Fed chair speculation:
Sentiment was also dented after Trump said Kevin Hassett may not become the next Chair of the US Federal Reserve and could continue as Director of the White House National Economic Council. Hassett is seen as relatively supportive of policy easing, and uncertainty over his appointment led to some moderation in expectations of aggressive rate cuts in 2026, weighing on global markets.
4) India VIX rises:
The volatility index, India VIX, climbed more than 5 per cent to 11.98, reflecting rising investor caution.
5) Persistent FII selling:
Foreign institutional investors remained net sellers for the ninth straight session on Friday, offloading shares worth Rs 4,346.13 crore.
“The sustained selling by FIIs continued for the week ending January 16. Total FII selling for January up to January 16 stood at Rs 22,529 crore. This month FIIs were sellers on all days except one. The underperformance of India vis-a-vis other major markets is continuing in early 2026 also,” Vijayakumar added.
