The Indian stock market extended its bearish run for the sixth consecutive session on Monday, January 12, as investors grappled with multiple headwinds including rising geopolitical risks, concerns over US tariffs, and persistent foreign capital outflow. Both benchmark indices recorded significant declines during the trading session, continuing the downward trajectory that has characterized market performance over the past week.

Market Performance Overview

The market decline was broad-based, with both major indices experiencing substantial pressure throughout the trading session. The following table summarizes the key market movements:

The Sensex crashed over 500 points during the session, representing a decline of more than 0.60% to reach an intraday low of 83,043. Similarly, the Nifty 50 dropped to 25,529, falling 0.60% during Monday's trading session.

Six-Day Decline Impact

The sustained market weakness has resulted in significant losses across both indices over the six-session period. The cumulative impact of the decline is substantial:

Over the six consecutive sessions, the Sensex has declined by more than 2,700 points, representing a drop of over 3%. The Nifty 50 has similarly shed more than 3% during this period, reflecting the broad-based nature of the market decline.

Investor Wealth Erosion

The sustained market decline has had a significant impact on investor wealth and overall market capitalization. The erosion of market value has been substantial:

Investors have seen their wealth eroded by more than ₹16 lakh crore during these six sessions. The overall market capitalisation of BSE-listed firms has dropped to nearly ₹465 lakh crore from over ₹481 lakh crore recorded on January 2.

Market Pressures

The continued decline in Indian equities is attributed to several key factors that are weighing on investor sentiment. The market is currently facing pressure from rising geopolitical risks, which have created uncertainty in global markets. Additionally, concerns over potential US tariffs are adding to the cautious approach adopted by investors. The relentless foreign capital outflow from Indian markets continues to be a significant factor contributing to the sustained selling pressure across various sectors and market segments.

Indian equity markets extended their sharp decline on Monday, with benchmark indices deepening a selloff that has wiped out nearly ₹17 lakh crore in market value over six trading sessions. The BSE Sensex dropped over 500 points to hit an intraday low of 83,043.45, while the NSE Nifty 50 slid over 140 points, falling below the 25,550 mark during early trade.

Market Performance Overview

The scale of the market decline has been significant across both major indices:

From a closing high of 85,762.01 on January 2, the Sensex has shed more than 2,718 points, while the Nifty has declined approximately 3% over the same period. The market capitalisation of all listed BSE companies has fallen by ₹16.85 lakh crore in six days to ₹464.39 lakh crore.

Key Factors Behind the Selloff

Trump Tariffs and U.S.-India Trade Uncertainty

Uncertainty over U.S. tariff policies has emerged as a primary concern for investors. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that "the market has turned distinctly weak, weighed down by a series of India-specific and global geopolitical events. The drama surrounding the US-India trade deal is getting murkier with strange remarks from the US administration."

The absence of an anticipated U.S. Supreme Court ruling on Trump tariffs has prolonged policy uncertainty. Vijayakumar explained that "an expected ruling on Trump tariffs from the US Supreme Court on Friday didn't materialise; there is no clarity on when this will happen. Yet it can happen any time and, therefore, investors have to be watchful of the development on this front."

Persistent Foreign Institutional Investor Selling

Foreign institutional investors have maintained their selling pressure, with outflows worth ₹3,769 crore recorded on Friday, January 9. This marked the sixth consecutive session of FII selling after a brief pause on January 2. The sustained withdrawal of foreign capital has significantly impacted market liquidity and amplified losses amid global uncertainty.

Global Market Headwinds

International market conditions have added to the cautious sentiment on Indian bourses. Concerns emerged around Federal Reserve independence after Fed Chair Jerome Powell revealed that the Trump administration had threatened him with criminal indictment. This development unsettled global investors and contributed to risk-off sentiment.

Market Volatility and Outlook

The India VIX has spiked, indicating heightened volatility ahead. Vijayakumar highlighted that "geopolitical developments in Venezuela, the crisis in Iran and Trump's threats regarding Greenland are also being viewed by the markets with concern. This has spiked the India volatility index India VIX indicating big volatility ahead."

The current decline represents the market's worst weekly performance in more than three months, reflecting broad-based investor unease. The combination of domestic policy uncertainty, persistent foreign selling, and global geopolitical tensions has created a challenging environment for Indian equities, with investors remaining cautious about near-term market direction.