Indian Stock Market Faces Sharp Decline Amid Global Tensions

On January 12, 2026, the Indian stock market opened to a significant decline, with both the Sensex and Nifty indices dropping sharply. This downturn contrasts with positive trends in other Asian markets and is attributed to various factors, including geopolitical tensions in Iran, persistent selling by foreign institutional investors, and concerns over potential tariffs from the U.S. The article delves into the reasons behind this market behavior and its implications for investors.

By Narendra Chaudhary Jan 12, 2026, 11:18 IST

Market Opening on January 12, 2026

The Indian stock market experienced a significant downturn at the start of trading on January 12, 2026 (Monday). As soon as the market opened, both the Sensex and Nifty indices saw a steep decline, contrasting with the upward trends observed in other Asian markets such as Japan, South Korea, and Hong Kong. This drop appears to exacerbate the ongoing weakness from the previous week, during which the Sensex fell by approximately 2,185 points and the Nifty dropped over 2.5%.

Initial Trading Conditions

BSE Sensex: Opened at 83,435.31, down from the previous session's close of 83,576.24, and quickly fell over 525 points to around 83,043.
NSE Nifty 50: Started at 25,669.05, compared to the last close of 25,683.30, and plummeted by more than 150 points to 25,529. This decline was primarily influenced by global geopolitical tensions, particularly the ongoing protests in Iran and the subsequent rise in crude oil prices. The economic crisis in Iran and widespread protests against the Supreme Leader have heightened uncertainty in global markets, putting pressure on oil-importing nations like India.

Why Other Asian Markets Are Up?

Markets in Japan (Nikkei), South Korea (Kospi), and Hong Kong (Hang Seng) were trading positively. These markets benefited from the strength in the tech and AI sectors, regional policy support, and fewer adverse factors. In contrast, India faced persistent selling by Foreign Institutional Investors (FIIs), concerns over potential tariff policies from the Trump administration (with fears of tariffs ranging from 25% to 500% on Indian goods), and energy worries linked to the Iran crisis.

Key Factors Influencing the Market

Impact of Unrest in Iran: Protests that began in December 2025 have spread across Iran. Despite internet shutdowns and violent crackdowns, demonstrators remain active, leading to a spike in crude oil prices, which negatively affects India (which imports over 85% of its oil).
FII Selling Pressure: Significant selling by FIIs in January has increased pressure on the market.
Tariff Threats from Trump: Concerns over additional tariffs on Indian imports of Russian oil from the U.S. have made investors cautious.
Domestic Factors: The impact of five consecutive sessions of decline last week (resulting in a loss of nearly ₹9 lakh crore in market capitalization) continues to be felt.