NEW DELHI: India’s equity market is having a turbulent start to 2026 with US President Donald Trump’s foreign and tariff policies denting investor sentiment. Actions like arresting Venezuela’s President Nicolas Maduro, confronting Iran, threatening 500% tariffs on nations buying Russian oil and pushing to claim Greenland while targeting European allies with duties have spiked geopolitical tensions. These moves have amplified market volatility amid ongoing trade uncertainties.
The BSE Sensex has fallen 1,942 points (2.28%) and the Nifty50 has declined 561 points (2.15%) year-to-date. On Monday (January 19, 2026), the Sensex fell 324 points, or 0.39%, to close at 83,246.18, while the Nifty 50 plunged 109 points, or 0.42% to settle at 25,585.50. During the intraday session, the 50-share index fell to its lowest level in a month.
Experts believe that these actions have driven investors to safe havens, prompting exits from riskier equities, especially in emerging markets and tariff-exposed sectors. The latest market jolt follows Trump’s weekend signal of higher tariffs on several European nations from February 1.
“The announcement rekindled concerns over global trade disruptions and economic growth, prompting investors to adopt a cautious stance…Overall, persistent global uncertainties and the unfolding earnings season continued to influence market direction, resulting in a volatile and cautious trading environment,” said Ashika Institutional Equities.
Emerging geopolitical tensions have overshadowed India’s strong domestic fundamentals and triggered a fresh wave of foreign capital outflows from local markets. FII selling reached Rs 22,529 crore through January 16 with net sales on all but one day this month.
“Global cues remained weak as Japanese government bond yields surged, with the benchmark 10-year yield climbing to around 2.3%—the highest level since February 1999—amid fiscal jitters and concerns that election-related tax cuts could further strain Japan’s finances. Risk appetite was further dampened after renewed trade-related rhetoric from the US, with Trump reiterating plans to levy taxes on European countries opposing his stance on Greenland,” Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services.
Trump’s actions have heightened trade tensions and uncertainty, leading to investor caution and sell-offs from India. His latest threat of slapping 500% tariffs on imports from nations buying Russian oil has put serious pressure on India as the country is the second-largest importer of discounted Russian crude. Existing US tariffs of up to 50% on Indian goods have already put Indian exporters at a disadvantage.
Not-so-encouraging Q3FY26 earnings results from blue-chip heavyweights have also jolted sentiment with Wipro shares falling over 8% on Monday. Reliance Industries declined 3.5%, ICICI Bank dropped 3.4% and HDFC Bank slipped 1% during the session.
The turbulence in the equity market continues to force investors to move towards precious metals, especially silver. As of mid-January 2026, Silver has delivered nearly 30% returns, building on the momentum of 2025. Silver prices crossed the Rs 3 lakh-per-kg milestone in futures trade for the first time on Monday.
Amit Jain, Co-Founder of Ashika Global Family Office Services said that gold and silver are no longer just commodities, they are geopolitics in metal form. “When major powers fight over resources like Greenland, markets instinctively price in risk, and precious metals become the default refuge. This rally reflects not speculation, but a deeper loss of confidence in global stability,” added Jain.