On January 21, the Indian stock market experienced a significant downturn, with the Sensex dropping 1,300 points to 75,773 and the Nifty50 falling below 23,000. This volatility was primarily attributed to uncertainty surrounding U.S. President Donald Trump's newly announced tariff plans following his return to office.
Major stocks, including ICICI Bank and Reliance, saw substantial declines, exacerbating investor panic. The market's reaction was influenced by fears that delayed tariff announcements could prolong uncertainty, leading to increased volatility.
Foreign institutional investors (FIIs) have been withdrawing investments, with over ₹48,000 crore pulled from equity holdings since January 20. This trend is expected to continue, further impacting domestic investors.
The unpredictable nature of Trump’s tariff strategy has left investors in a state of apprehension, awaiting clearer guidance on affected sectors. As earnings reports for Q3 reveal disappointing results for many companies, the market sentiment remains bearish.