Benchmark stock indices Sensex and Nifty extended their losing streak to a third straight session on Wednesday, as geopolitical concerns continued to weigh on global sentiment. Stocks declined after the US Supreme Court again deferred its ruling on the legality of US President Donald Trump’s tariffs. Sentiment was further hit by a surge in US Treasury yields following Trump’s renewed threat of tariffs on European nations over the Greenland issue. Adding to the pressure were a record low rupee and persistent foreign outflows. Mixed quarterly earnings and weak technical charts were other concerns.
The BSE Sensex plunged 1,056 points to hit a low of 81,124.45. At 11.04 am, the 30-pack index was trading at 81,307.03, down 872.07 points or 1.07 per cent. Nifty slipped below the psychological mark of 25,000 and was trading at 24,982.55, down 249.95 points or 0.99 per cent. The 50-pack index hit a low of 24,919.80. A total of 22 of 30 Sensex stocks were trading in the red. Trent, ICICI Bank, Bharat Electronics Ltd (BEL), Larsen & Toubro and Axis Bank declined 1-3 per cent.
Trump tariff war
VK Vijayakumar, Chief Investment Strategist at Geojit Investments said there is risk-off sentiment in global markets now in response to Trump’s Greenland policy, the threatened tariffs on eight European countries and Europe’s hardening anti-Trump stance.
“Globally stock markets are down and the flight to the safety of gold is up. There is no clarity on how the situation will evolve. If the threatened tariffs come into effect, Europe will retaliate and this will lead to a trade war with bad consequences for global trade and global growth. If such a scenario plays out stock markets will witness further selling,” he said.
US court ruling
The US Supreme Court has reportedly dashed hopes of a swift rollback of Trump’s tariffs. A Bloomberg report indicated that the next possible decision is likely by February, as the justices are set to begin a four-week recess next week without having ruled on the duties imposed by Trump over the past year.
Rupee at record low, FPI outflows
Earlier in the day, the rupee hit record low, depreciating 19 paise to 91.26 against the dollar against its previous close of 90.98. Foreign equity outflows have hit Rs 29,135 crore in January, the worst since August 2025. “The rupee is likely to trade between 90.45 and 91.45 in the near term,” said Jateen Trivedi of LKP Securities.
US yields, mixed Q3 results
Ponmudi R, CEO of Enrich Money said Q3 earnings have so far been mixed-to-weak across several heavyweights, particularly in IT, auto, real estate and select financials. He said the the sudden escalation in Tariff war has rattled risk sentiment across asset classes, leading to heavy unwinding in equities, a spike in US Treasury yields with clear bear-steepening across the curve, and a strong rush toward safe-haven assets.
US 10-year yield last stood at 4.281. “Ahead of the Union Budget on February 1, expectations of a capex push in railways, defence and consumption support remain constructive, but these positives are not yet strong enough to counter the prevailing global uncertainty. Short-term technical bounces may emerge if DII inflows absorb supply or if FII selling eases, but investor confidence in the sustainability of such moves remains low in the current environment,” he said.
Technical charts
Nifty has breached 25,000 level. With this, Nifty has slipped below its 200-day EMA of 25,100, which was holding since April 2025.
“Market breadth is always the good indicator to understand the sentiment of the market. Historically it has been observed that whenever the net of advance-decline of total CNX500 has approached toward the level of 440-470 it is a sign of capitulation and market has a tendency to form temporary bottom in the couple of weeks. In the yesterday trading session, it has approached towards 440 levels. We expect index to maintain this rhythm and should enter into base formation,” ICICI Securities said.
Market strategy
ICICI Securities advised traders to refrain from aggressive selling at current levels and instead adopt a selective accumulation approach, focusing on quality stocks delivering strong Q3 earnings.
Vijayakumar said if Trump chickens out as he had done in the past, or succumbs to pressure, markets will rebound. He noted that combined and united Europe has many options like the much talked about ‘Sell America’ wherein they sell US treasuries leading to sharp fall in dollar.
“This will hurt Trump. Public opinion in US is also against Trump’s Greenland annexation plan. Many unexpected developments can happen and the market is likely to react strongly to the developments,” he said.
Investors, he said, should wait and watch for normalcy and stability to return. Fairly-valued largecap stocks, particularly in banking, are likely to remain resilient, he added.
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