Benchmark indices witnessed their steepest single-day decline in over eight months on Tuesday, with the Nifty plunging 353 points or 1.38 per cent to close at 25,232.50, its lowest level since October 14, 2025. The Sensex tumbled 1,065.71 points or 1.28 per cent to settle at 82,180.47, as renewed US tariff threats and weak corporate earnings triggered panic selling across all segments.
The selloff intensified after the US administration issued a “Greenland Tariff” ultimatum, threatening 10-25 per cent levies on European nations. “The market is currently besieged by a perfect storm of global geopolitical tension and domestic fundamental weakness,” said Santosh Meena, Head of Research at Swastika Investmart. “This uncertainty, coupled with a weakening Rupee, has forced investors to aggressively dump emerging market assets like Indian equities in favor of safe havens such as Gold and US Treasury bonds.”
The broader market bore the brunt of the carnage, with the Nifty Midcap 100 plummeting 2.62 per cent to 58,085.35 and the Nifty Smallcap 100 crashing 2.85 per cent to 16,701.05. “The Midcap index closed below its 200-day EMA for the first time since August 2025, signalling a potential shift in medium-term trend,” noted Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.
Market breadth remained extremely weak, with 3,590 stocks declining against just 707 advances on the BSE. A staggering 713 stocks hit 52-week lows, while only 65 touched 52-week highs. “Market breadth remained negative for the eighth consecutive session,” said Nandish Shah, Deputy Vice President at HDFC Securities.
All sectoral indices closed deep in the red. Nifty Realty led the decline with a 5 per cent drop, while Auto, IT, Media, Metal, PSU Bank, Pharma, Oil & Gas, and Consumer Durables declined 1.5-2.5 per cent. The Nifty Next 50 plunged 2.30 per cent to 67,110.90, while Nifty Financial Services fell 1.16 per cent to 27,200.60 and Nifty Bank dropped 0.81 per cent to 59,404.20.
Among Nifty stocks, only three managed to close in positive territory. Dr Reddy’s Laboratories gained 0.46 per cent to close at ₹1,172.60, HDFC Bank rose 0.28 per cent to ₹930.50, and Tata Consumer Products added 0.28 per cent to ₹1,183.50. On the losing side, Adani Enterprises plummeted 3.96 per cent to ₹2,050.00, Bajaj Finance tumbled 3.89 per cent to ₹931.75, Jio Financial Services declined 3.72 per cent to ₹265.40, Eicher Motors fell 3.59 per cent to ₹271.25, and Coal India dropped 3.29 per cent to ₹416.00.
“The benchmark Nifty index witnessed a brutal selloff on Tuesday, marking its steepest single-day decline since April 7, 2025,” said Shah. “With this slide, the index has now corrected over 4 per cent in just 10 trading sessions.” The daily RSI dropped to 29.27, its weakest reading since March 2025, indicating oversold conditions.
The pain in smaller stocks has been particularly severe. “It has been a one-way fall for the small-cap index since the start of November last year. At the index level, small caps are down over 11.5 per cent since then,” said N ArunaGiri, CEO of TrustLine Holdings. “A large number of stocks are down 40-50 per cent. This is not a universal buy-on-dips market. It is a market that rewards selective bottom-up stock-specific approach.”
The Indian rupee extended its losing streak, depreciating 6 paise to close at 90.97 against the dollar. “Despite the central bank’s attempts to anchor the currency, the effort was eclipsed by a relentless surge in corporates and importers greenback demand,” said Dilip Parmar, Research Analyst at HDFC Securities.
Technically, the Nifty has reached a critical juncture at its 200-Day Moving Average near 25,150. “Widely regarded as the dividing line between a long-term bull and bear market, a decisive close below this level would be technically catastrophic,” warned Meena. Ajit Mishra, SVP Research at Religare Broking, added that “a decisive break below the long-term moving average could open the door for further downside towards the 24,900 level.”
Market volatility is expected to persist until clarity emerges on the US-Europe tariff standoff, with analysts suggesting any recovery will depend on banking and IT sectors showing resilience, while immediate resistance is expected at 25,400-25,600 levels.
Published on January 20, 2026
