Indian Stock Market Faces Sharp Decline Amid Global Uncertainty and Domestic Concerns
The Indian stock market saw a significant decline on Monday, with benchmark indices experiencing heavy selling pressure. A combination of weak global cues, foreign fund outflows, and uncertainty regarding US trade policies led to the downturn.
Mumbai: The Indian stock market saw a significant decline on Monday, with benchmark indices experiencing heavy selling pressure. A combination of weak global cues, foreign fund outflows, and uncertainty regarding US trade policies led to the downturn.
Table of Contents
US Tariff Announcement Sparks Fears of Global Trade Tensions
One of the primary catalysts for the fall was the announcement by US President Donald Trump of a 25% tariff on all Colombian goods entering the United States. This move, made in response to Colombia’s decision to block US military deportation flights, has raised concerns of escalating global trade tensions, which could negatively impact markets worldwide, including India.
Federal Reserve’s Upcoming Meeting Raises Speculation on Interest Rates
Adding to the market’s uncertainty is the upcoming Federal Open Market Committee (FOMC) meeting, scheduled for January 28-29. While analysts expect the Federal Reserve to maintain current interest rates, speculation about possible rate cuts in March is growing. Investors are concerned about President Trump’s economic policies, including the extension of tax cuts and tariffs, which add to the overall uncertainty surrounding the US economy and its global impact.
Foreign Fund Outflows and Muted Earnings Weigh on Investor Sentiment
Sustained foreign fund outflows have been a significant drag on the Indian stock market. In addition, weaker-than-expected third-quarter earnings from Indian companies have further eroded investor confidence. This combination of disappointing corporate earnings and capital outflows has added significant pressure on the market.
Chinese AI Developments Add to Market Uncertainty
The Indian market is also grappling with concerns over a new cost-efficient AI model from Chinese firm DeepSeek. This innovation has the potential to disrupt the businesses of major tech companies like Nvidia and Google, which adds further uncertainty to global tech markets and contributes to the negative sentiment affecting Indian stocks.
Also Read: https://munsifdaily.com/indian-stock-market-2/
Global Market Performance and Impact on Indian Stocks
Global markets provided limited support, with US stock futures trading lower during Asian hours. The S&P 500 futures dropped by 1%, and Nasdaq 100 futures fell by 1.9%. Asian markets reflected mixed sentiment, with Hong Kong’s Hang Seng Tech Index rising by 2%, while Japan’s Nikkei 225 futures fell by 0.6%. Shares of Nvidia supplier Advantest Corporation dropped by 8.6% in Tokyo, and SoftBank Group shares fell by 5.4%.
Indian Stock Indices See Significant Decline
In India, the BSE Sensex plunged by 842.4 points, or 1.1%, to an intraday low of 75,348.06. Meanwhile, the NSE Nifty dropped by 265.35 points, or 1.14%, breaching the 22,850 level and touching 22,826.85. Although the indices saw a slight recovery later in the session, they remained in the red, with the Sensex down by 772 points and the Nifty down by 249 points around 2:30 p.m.
The market’s decline reflects the growing global and domestic challenges investors are facing, with ongoing uncertainty about trade policies, interest rates, and the broader economic landscape.
Stay tuned for more updates on the Indian stock market’s performance and its response to global and domestic developments.
