SENSEX tanks 621 pts, NIFTY50 slips below 26,000: 500% tariff threat, slide in IT, metals among key factors behind the rout

The Indian equity market continued to remain under pressure in the afternoon session on Thursday, January 8, as investor sentiment was dampened by negative global cues, trade uncertainties and foreign fund outflows.

The broader market was also underperforming, with the Nifty Midcap 100 and Nifty Smallcap 100 falling 1.65% and 1.75%, respectively. On the Midcap index, about 94 stocks were trading in the red, while nearly 91 stocks on the Smallcap index were also declining.

The market breadth stayed weak, with 3,095 stocks trading on the NSE in noon deals—only 544 advanced, while 2,474 declined and 77 remained unchanged. Meanwhile, only 40 stocks hit their one-year high, while 120 stocks touched their 52-week lows.

Hindalco Industries was the biggest laggard, declining 4.18%, followed by JSW Steel (-2.87%), ONGC (-2.71%), Jio Financial Services (-2.71%), and Adani Enterprises (-2.47%).

On the other hand, Bharat Electronics (0.63%), ICICI Bank (0.62%), SBI Life Insurance (0.51%), Adani Ports (0.51%), and Eternal (0.48%).

Here are the factors behind the market fall

Sectors drag

All the sectoral indices were trading with losses, with Nifty Metal taking the lead, slumping 3.25%. Nifty Oil & Gas (-2.44%), Nifty PSU Bank (-1.65%), Nifty IT (-1.45%), Nifty Realty (-1.27%) and Nifty Auto (-1.02%) were the other big draggers.

The Nifty Metal index cracked as much as 3.46% to hit the low of 11,124.70 levels against the previous closing level of 11,524. A slide in metal stocks could be partially attributed to profit-booking in recent outperforming scrips such as Hindustan Copper and Hindustan Zinc (HZL), NALCO, Vedanta, and HINDALCO, among others, given the sharp rally in industrial metals such as copper and silver.

Trump backs sanctions bill proposing steep tariffs on India and others

US Senator Lindsey Graham on Wednesday said that the legislation would give the White House "tremendous leverage" against countries like China, India and Brazil to incentivise them to stop buying cheap oil from Russia.

“After a very productive meeting today with President Trump on a variety of issues, he greenlit the bipartisan Russia sanctions bill that I have been working on for months with Senator Blumenthal and many others,” Graham said in a post on X Wednesday.

“This bill would give President Trump tremendous leverage against countries like China, India and Brazil to incentivise them to stop buying the cheap Russian oil that provides the financing for Putin’s bloodbath against Ukraine,” he added.

Trump has imposed 50% tariffs on India, among the highest in the world, including 25% levies for its purchases of Russian energy.

Global markets

Globally, almost all the Asian shares were trading lower as the record-breaking rally lost steam, with Japan's Nikkei falling 1.33%, China's Shanghai Composite losing 0.11%, Hong Kong's Hang Seng declining 1.55% and Thailand's SET Composite dropping 1.41%.

On Wall Street, the S&P 500 broke its four-day winning streak to register its first loss of 2026. The S&P 500 declined 0.3%, and the Dow Jones fell 0.94%, while the tech-heavy Nasdaq advanced 0.16%.

Some of the market’s sharpest drops hit industries that President Donald Trump targeted with criticism on his social media network.

Foreign investor outflow

According to exchange data, on Wednesday, the foreign institutional investors (FIIs) sold shares worth ₹1,527.71 crore, while the domestic institutional investors (DIIs) bought equities worth ₹2,889.32 crore on a net basis.

The foreign investors have been withdrawing since the beginning of the year. In 2025, they have sold shares worth ₹1.66 lakh crore.

VIX India

The volatility gauge, India VIX, was trading at 10.84 levels, surging 8.94%. It had touched an intraday high of 10.99 on Thursday.  

The volatility index is a measure of the market’s expectation of volatility over the near term. Volatility is often described as the “rate and magnitude of changes in prices" and in finance often referred to as risk.

The index also indicates the expected short-term fluctuations in an underlying index. It is expressed as annualised volatility (in percentage terms, e.g., 20%) and is derived from the order book of the index’s options.