MUMBAI — The Indian equity markets faced a grueling Tuesday session as the S&P BSE Sensex crashed over 600 points, extending a streak of volatility that has plagued Dalal Street since the start of 2026. The downturn reflects a growing sense of unease among investors grappling with a “risk-off” environment triggered by geopolitical friction and persistent foreign fund outflows.
By mid-afternoon, the S&P BSE Sensex was trading at 82,634.34, down 611.84 points (0.74%), while the NSE Nifty 50 slipped 213.30 points to 25,372.20. The decline underscores the fragile state of Indian markets, which struggled throughout 2025 and have yet to find a stable floor in the new year.
IT SECTOR LEADS SECTORAL BLEED
The primary pressure point on Tuesday was the Information Technology (IT) sector. The Nifty IT index plunged nearly 2%, with every constituent stock trading in the red. The sell-off was fueled by concerns over global client spending and the looming uncertainty of international trade policies.
LTIMindtree emerged as the session’s biggest laggard, plummeting 6.53%. Other major casualties included:
- Mphasis: Down 2.38%
- Wipro: Down 2.34%
- Tech Mahindra: Down 2.23%
- TCS & Infosys: Both shed over 1% as heavyweights faced consistent selling pressure.
THE GREENLAND TARIFF SHADOW
The domestic gloom is inextricably linked to an intensifying trade standoff between the United States and Europe. President Donald Trump’s administration has tied potential tariffs to the Greenland acquisition dispute, a move that has rattled global supply chains.
Experts suggest that until there is a resolution to the US-Europe standoff or a potential ruling from the Supreme Court of the United States regarding these executive tariffs, the markets are likely to remain in a consolidation-cum-corrective phase. “Uncertainty is likely to stay until there is some clarity on the Greenland tariffs,” noted a senior investment strategist, adding that a sudden judicial ruling against the tariffs could be the only immediate catalyst to reverse the current mood.
FIIS CONTINUE AGGRESSIVE EXIT
A major headwind for the Indian market remains the relentless selling by Foreign Institutional Investors (FIIs). In the first three weeks of January 2026 alone, FIIs have offloaded shares worth a staggering ₹29,315.22 crore.
While Domestic Institutional Investors (DIIs) have attempted to cushion the blow—pumping in ₹38,311.01 crore during the same period—the sheer volume of foreign outflows has prevented any meaningful recovery in the benchmark indices.
BROADER MARKETS: A SILVER LINING?
Despite the carnage in large-caps and IT, the broader market showed surprising resilience. The Nifty Midcap 100 rose 1.89% and the Nifty Smallcap 100 gained 2.17%, suggesting that retail and domestic buyers are finding value in niche segments. Additionally, the India VIX, which measures market fear, cooled by 3.92%, indicating that while the indices are down, the panic has not yet reached extreme levels.
However, with the much-anticipated US-India trade deal still nowhere in sight and sectoral indices like Nifty Realty (down 4.49%) and Nifty Pharma (down 1.70%) joining the retreat, the road to recovery for Dalal Street remains steep.