The cut in the stock market is getting deeper. The equities continued to be under pressure for the second straight session. Selling intensified across the board. Weak global cues, rising geopolitical worries and underwhelming quarterly earnings kept investors cautious. By afternoon trade, indices slipped deep into the red, with losses spreading to almost all sectors.
At this hour, the Sensex is down over 1,200 points while the Nifty is struggling below the crucial 25,200 mark. The broader markets saw sharper cuts, with both small and midcap indices declining by more than 2%.
Let’s take a look at the key factors why the market are falling –
Global worries about Greenland
One of the key reasons behind today’s market fall is growing global uncertainty. Investors are uneasy about rising trade war risks after fresh geopolitical tensions emerged between the United States and Europe. US Treasury Secretary Scott Bessent expressed confidence that the United States and European countries will find a solution over the US administration’s aim to take over Greenland, brushing off “hysteria” about a possible trade war. US President Donald Trump announced tariffs on imports from European allies that oppose the Greenland takeover. EU leaders are set to discuss possible retaliation at an emergency summit in Brussels on Thursday.
Moreover, the US Supreme Court is expected to deliver a fresh set of rulings on January 20 on Trump’s global tariff policy. The investors are cautious ahead of this key ruling.
Earnings season
The ongoing third-quarter (Q3FY26) earnings season has not provided much comfort so far. Corporate results have been mixed, with several companies reporting muted growth. The impact of one-time factors, including changes related to new labour norms, has also clouded earnings visibility.
Broader market takes a bigger hit
The pain has been sharper in the broader market. Midcap and smallcap stocks are now facing deeper corrections. With sectoral indices such as automobiles, information technology, media, metals, pharmaceuticals and financials all trading in the red, down 1-2%.
Volatility to persist amid global uncertainty
Market volatility is expected to stay elevated in the near term as investors await clarity on rising global tensions, particularly the standoff between the United States and Europe over potential tariff actions linked to Greenland, according to Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.
He noted, “The volatility in the market is likely to continue in the near-term till some clarity emerges regarding the US-Europe standoff on Greenland tariffs… The IMF has raised India’s FY26 GDP growth rate to 7.3%, confirming the economy’s resilience…Geopolitical and geo-economic issues will continue to dominate and influence market direction.”