Sensex falls over 150 points, Nifty tests 25,250 points on sell-off pressure, FII outflow weighs on sentiment

Indian shares opened marginally lower on Wednesday, adding to pressure from the previous session’s sharp sell-off that dragged the Sensex and Nifty to their weakest levels in more than three months. Continued foreign fund outflows, uneven corporate profits and persistent concerns about global trade and geopolitics continued to weigh on sentiment.The BSE Sensex fell 102 points, or 0.22%, to 82,078.16 in early trade, while the NSE Nifty 50 fell 17 points, or 0.07%, to 25,215.55, falling below 25,250 as markets seesawed between modest gains and losses.

On the 30-share Sensex, ICICI Bank, Trent, Bharat Electronics, Larsen & Toubro and HDFC Bank were among the biggest setbacks, with shares down between 0.5% and 1% in early trade.Broader markets also came under pressure, with both the midcap and smallcap indices down around 0.3%.

Among individual stocks, shares of Persistent Systems fell 3.5%, retreating despite mostly positive commentary from brokers following the IT services company’s quarterly results.

AU Small Finance Bank shares rose more than 2% after posting a strong set of quarterly results in December, including a 26% year-on-year increase in net profit.

The benchmark indices had a blistering session on Tuesday as the Nifty 50 and the Sensex fell around 1.4% and 1.3% respectively, their steepest single-day decline in over eight months, to end at the lowest closing level in over three months.Expert views

There is now a sense of risk in global markets in response to Trump’s Greenland policy, the threatened tariffs on eight European countries and the hardening anti-Trump attitude of Europe and global stock markets have fallen and the flight to the safety of gold is underway, and there is no clarity on how the situation will develop, said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments.

“If the threatened tariffs come into effect, Europe will retaliate and this will lead to a trade war with bad consequences for world trade and global growth. If such a scenario plays out, stock markets will witness further selling. On the other hand, if Trump fades away as he has done in the past, or succumbs to pressure, markets will recover. A combined and united Europe has many options, such as the much-discussed ‘Sell America’, where they sell US government bonds, which will lead to will lead to a sharp decline in the dollar. This will hurt Trump. Public opinion in the US is also against Trump’s annexation plan for Greenland. There could be many unexpected developments and the market is likely to react strongly to the developments,” said Vijayakumar.

Investors can watch and wait for normalcy and stability to return, Vijayakumar said, adding that moderately valued largecap stocks, especially in the banking sector, are likely to remain resilient.

FII/DII tracker

On the institutional front, foreign institutional investors (FIIs) sold shares worth a little over Rs 2,938 crore on January 20, while domestic institutional investors (DIIs) were net buyers at Rs 3,666 crore.

Global markets

Asian shares fell for the third time in a row on Wednesday, pressured by renewed geopolitical unease after new US rhetoric on Greenland ahead of US President Donald Trump’s speech in Davos. Risk sentiment remained fragile, even as the recent global bond sell-off showed signs of easing.

Markets were also roiled by concerns about renewed offshore sales of US assets, reviving the so-called ‘Sell America’ trade. Wall Street fell more than 2% overnight, while the US dollar posted its sharpest daily decline in more than a month, pushing investors towards traditional safe havens.

MSCI’s broad Asia-Pacific index, excluding Japan, fell 0.3% in early trading. Japan’s Nikkei fell 1.2%, extending its losing streak to a fifth session.

Gold and silver rose to new highs, underscoring the risk-off tone. Gold rose 0.8% to a record $4,806 an ounce, while silver rose 0.4% to $95.01, hovering around its recent peak.

U.S. stock futures edged higher, with Nasdaq and S&P 500 futures rising 0.2% after Wall Street’s steepest one-day decline in three months. In Europe, Euro Stoxx 50 and DAX futures fell 0.4%.

Rough impact

Oil prices fell on Wednesday, pressured by expectations of a surge in US crude inventories that overshadowed temporary production disruptions at two major fields in Kazakhstan, and continued geopolitical unrest related to US tariff threats.

Brent crude futures fell 79 cents, or 1.2%, to $64.13 a barrel, while U.S. West Texas Intermediate fell 64 cents, or 1.1%, to $59.72 in early Asian trading.

Rupee vs dollar

The Indian rupee fell to a record low on Wednesday, sliding past the previous low of 91.0750 in early trade and weakening around 0.24% to 91.19 against the dollar, pressured by a risk shift in global markets as geopolitical tensions around Greenland added to existing pressure on the currency.

Meanwhile, the US dollar was little changed against a basket of major peers at 98.56, following its steepest daily decline since early December in the previous session.

(with input from agencies)