The Indian stock market extended its losing streak for the fifth straight session on Friday, January 9, deepening the red as investor sentiment took a severe beating. The benchmark Nifty 50 index fell by 0.80% to touch an intraday low of 25,665 points.
A Steep Weekly Decline
Over the course of these five consecutive trading sessions, the index has witnessed a cumulative loss of 663 points, or 2.5%. This marks the worst weekly performance for the Indian equity market in more than three months. The sell-off has caused local stocks to underperform their Asian peers in the early days of January, despite starting the year on a strong note by hitting a fresh record high of 26,273.
What's Driving the Market Down?
The optimism at the start of 2026 quickly evaporated due to a confluence of negative factors. Escalating geopolitical tensions following US military action in Venezuela and, more critically, fresh warnings from US President Donald Trump regarding potential tariff hikes on Indian exports have severely dampened confidence.
Earlier this week, Trump warned of imposing higher tariffs if India does not stop purchasing Russian oil. He has backed a bipartisan US bill proposing tariffs as high as 500% on nations buying Russian oil, which is awaiting congressional approval. The US has already imposed a total tariff of 50% on India for its Russian oil purchases, which Washington views as funding Russia's war in Ukraine.
These developments have not only hurt market sentiment but also threaten to delay a trade agreement between India and the US, which has been under negotiation for multiple rounds.
FPI Exodus Continues Unabated
The tariff warnings triggered a significant sell-off by Foreign Portfolio Investors (FPIs). Data from NSDL shows that FPIs were net sellers for most of 2025, withdrawing a staggering ₹1.66 lakh crore—a record figure.
This trend has spilled over into 2026. Foreign investors remained net sellers in five out of the first six trading sessions of the new year, pulling out an additional ₹8,305 crore from the secondary market. This persistent selling pressure has been a major contributor to the market's weakness.
Markets Await US Supreme Court Verdict
All attention is now focused on the United States Supreme Court, which is set to rule on the legality of the tariffs imposed by President Trump on trade partners. The verdict is expected on Friday, January 9, a day scheduled as an "opinion day."
Commenting on the potential outcome, Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated, "There is a high probability of the verdict going against Trump. But the details are significant." He explained that the market's reaction would hinge on whether the court partially or completely strikes down the tariffs.
"If the Supreme Court declares Trump tariffs illegal, there would be a rally in India since India has been the worst affected by the 50% tariffs," he added. Dr. Vijayakumar also noted that the broad market correction has impacted even sectors unrelated to the tariff issue, presenting a potential accumulation opportunity in segments like financials, consumer discretionary, and industrials for long-term investors.
Historically, January has been a weak month for Indian equities, with the Nifty 50 closing lower in each of the past five years. The current month is also busy with corporate business updates and December quarter results, which typically keep investor sentiment cautious.
