Tariff Fears Drown Sensex: Market Dives Close to 1,400 Points as FPIs Dump Shares

The Indian equity market plunged sharply on Tuesday, with the Sensex falling almost 1,400 points, as concerns over possible tariffs by former U.S. President Donald Trump shook investor sentiment. The benchmark Sensex closed at 76,025 points, down by 1,390 points (1.8%), its worst single-day loss since February 28. The Nifty 50 trended similarly, falling 354 points (1.5%) to close at 23,166 points.
Market mood was additionally subdued by high crude oil prices and continued foreign portfolio investor (FPI) selling, which led to a sharp plunge in key shares like HDFC Bank, ICICI Bank, Reliance Industries (RIL), and Infosys.
Sensex opens lower, continues losses throughout the day
The day of trading started on a sour note, with the Sensex opening more than 500 points down, reflecting losses in global markets on Friday and Monday. Though there was a temporary recovery in the morning hours, the index could not hold on to gains and drifted steadily during the day, closing deep in the red.
As per Satish Chandra Aluri, a Lemonn analyst, the bearish trend was anticipated since Indian markets had been closed on Monday and had to recover losses from global markets.
Foreign investors drive the sell-off
The selling was led predominantly by foreign portfolio investors (FPIs), who sold stocks amounting to ₹5,902 crore, according to BSE data. Domestic institutional investors (DIIs), meanwhile, came in as buyers, purchasing ₹4,323 crore worth of shares.
The massive FPI selling reflected a risk-off sentiment, probably due to worries about global trade policies, inflationary pressures, and geopolitical tensions.
Volatility peaks with sustained losses
The dramatic fall in equity markets saw volatility surge, with the India VIX, an indicator of market unease, rising 10.5% to 13.9 points. This shows that investors anticipate increased market fluctuations in the short term. The steep fall during the day depleted investors’ wealth by ₹3.5 lakh crore, taking BSE’s overall market capitalisation to ₹409.4 lakh crore.
Large-cap stocks suffer the brunt of selling pressure
The market disturbance on Tuesday witnessed large-cap stocks getting hit the hardest, with only two of 30 Sensex stocks — IndusInd Bank and Zomato — posting gains and closing in the green. Blue chips like HDFC Bank, ICICI Bank, Reliance Industries, and Infosys led the plunge, taking the index down.
Though frontline stocks took the brunt, mid- and small-cap stocks were relatively robust. The BSE midcap index fell 1%, while the smallcap index edged up 0.1%, reflecting selective selling. This disparity indicates that investors focused on profit booking in frontline stocks, while smaller stocks enjoyed some buying interest, helping to soften the decline in the overall market.

Sectoral performance: IT, real estate, and consumer durables take the hit
Among the different industries, IT, real estate, and consumer durables stocks bore the brunt, with investors offloading high-valuation stocks in light of increasing economic uncertainty. Gloomy global sentiment, inflation concerns, and doubts about tougher trade policies hit the sectors hard.
IT Stocks: Trade fears spur sell-off
The IT sector suffered a sharp decline with stocks like TCS, Infosys, Wipro, and HCL Tech witnessing heavy selling. A global economic slowdown and possible U.S. trade barriers influenced sentiments, with Indian IT majors earning a major share of their revenues in North America. Rising bond yields in the U.S. and currency fluctuations also added to concerns in investors’ minds, hitting tech stocks.
Real estate stocks: Increasing borrowing costs deter sentiment
Real estate stocks declined as bond yields rose and interest rate concerns clouded investor sentiment. Developers have a high dependence on loans to build and expand, and increasing borrowing costs would affect project viability and housing demand. Shares of industry leaders such as DLF, Godrej Properties, and Oberoi Realty fell.
Consumer durables: Inflation strikes demand
Consumer durable stocks were under selling pressure owing to inflationary worries and depreciation of the rupee, which affected consumer psychology. Rising prices of electronics, appliances, and luxury items deterred discretionary consumption, weighing on stocks such as Titan, Voltas, and Havells. In spite of the widespread selling, small-cap stocks depicted relative calmness, showing selective investor interest in niche opportunities.
Conclusion
Tuesday’s steep 1,400-point fall in the Sensex reflects the sensitivity of market sentiment in the face of global uncertainties and tariff concerns. The massive selling by foreign funds, along with higher crude oil prices and weakness in global markets, led to a widespread fall, especially in large-cap stocks.
Though domestic institutional investors lent support, the spurt in market volatility — with the India VIX higher by 10.5% — indicates that investors must prepare themselves for further swings in the short term. Market direction in the future will hinge on U.S. trade policy, global economic trends, and movements in crude oil prices. Long-term investors can look to selective buying in quality mid- and small-cap stocks, but one needs to be cautious as volatility remains high. In the short term, traders can monitor key support levels, sectoral trends, and FPI activity to guide market risks efficiently.
Excerpt:
Tariff worries spooked the markets as the Sensex plunged sharply, with FPIs selling shares. Big stocks such as HDFC Bank and Reliance were hit by heavy selling.