Indian equity markets extended their losing streak for the second consecutive session on December 9, 2025, as global sentiment weakened sharply following US President Donald Trump’s remarks indicating a potential 25 percent tariff on rice imports. The announcement rattled investors, triggered broad-based selling, and drove benchmark indices into the red, marking the first time in fifteen days that the Sensex slipped below the 85,000 mark.
Sensex and Nifty retreat as global cues weaken and tariff fears escalate
The trading session opened with noticeable caution, but selling intensified after Trump, during a White House discussion, suggested the United States could impose an additional 25 percent duty on rice imports. The comment sparked concerns in India, the world’s largest rice exporter, as higher import tariffs could disrupt trade flows, impact agricultural earnings and dampen export-linked sectors.
By the close, the Sensex had fallen 436 points to settle at 84,666.28, reflecting heavy pressure across banking, export-oriented and consumer-linked stocks. The Nifty also ended lower at 25,839.65, signalling broad weakness across most sectors. The decline followed Monday’s slump, when the Sensex had already dropped 610 points to end at 85,103, and the Nifty closed 226 points lower at 25,961. The consecutive declines underscored growing nervousness among investors amid shifting global trade dynamics.
Market participants noted that the tariff announcement sparked renewed uncertainty in an environment already marked by volatile foreign flows and global market corrections. India’s rice exports play a significant role in the country’s trade balance, and any substantial tariff barrier from the US—one of the world’s most influential import markets—could influence pricing, competitiveness and producer earnings. The reaction suggested that the domestic market remains highly sensitive to international policy cues, particularly those involving trade negotiations and commodity tariffs.
Global equity markets added to the pressure. Asian indices remained subdued, reflecting caution among investors as trade tensions resurfaced. Hong Kong’s Hang Seng fell 1.3 percent to 24,434.23, while the Shanghai Composite slipped 0.4 percent to 3,909.52. South Korea’s Kospi lost 0.3 percent to end at 4,143.55, and Taiwan’s Taiex declined 0.4 percent. The weakness across the region suggested that Trump’s tariff remarks may have heightened concerns about renewed protectionist measures and their potential to disrupt supply chains.
US markets had also ended lower the previous day, contributing further to negative sentiment. The Dow Jones Industrial Average closed down 0.45 percent at 47,739.32. The Nasdaq Composite dipped 0.14 percent, while the S&P 500 declined 0.35 percent, demonstrating ongoing investor anxiety surrounding interest rates, inflation signals and global trade shifts. Together, these factors weighed heavily on Indian benchmarks throughout the session.
Foreign investors continue to sell aggressively while domestic investors provide crucial support
Even as global pressure intensified, foreign portfolio investors accelerated their selling streak, deepening the market’s downward momentum. On December 8 alone, foreign institutional investors (FIIs) sold shares worth ₹779.94 crore in the cash segment, while domestic institutional investors (DIIs) stepped in to purchase ₹2,459.60 crore worth of equities, offering some cushion against heavy outflows.
The trend over the first six trading sessions of December revealed a stark contrast in investor behaviour. During this period, FIIs offloaded a substantial ₹10,982 crore, reflecting scepticism around emerging markets amid global uncertainties. Meanwhile, DIIs remained consistently bullish, purchasing ₹21,908 crore worth of equities and injecting stability into the market. Their buying activity helped prevent deeper corrections despite foreign selling.
The pattern mirrored movements from the previous month as well. In November, FIIs had sold a total of ₹17,500.31 crore, continuing a prolonged phase of profit-booking and risk aversion. DIIs, however, played a vital counterbalancing role by accumulating shares worth ₹77,083.78 crore, signalling strong domestic faith in the long-term resilience of Indian markets. Analysts observed that increasing domestic liquidity, strong retail participation and improved long-term economic indicators have allowed DIIs to absorb much of the selling pressure triggered by foreign outflows.
Monday’s fall had set the tone for Tuesday’s decline, as a significant drop of 610 points in the Sensex and 226 points in the Nifty reflected deteriorating global cues. Tuesday’s losses reinforced concerns that the announcement from Washington had been the primary catalyst for intensified selling. For sectors linked to global exports, particularly agriculture and commodities, tariff-related uncertainties add another layer of risk, influencing both current valuations and future earnings projections.
Across both sessions, volatility remained elevated, with traders adopting a wait-and-watch stance ahead of further clarity regarding US trade intentions. The possibility of additional tariffs introduces fresh complexities into India’s export landscape, particularly at a time when global demand conditions are fluid and geopolitical tensions remain high. Market strategists suggested that while domestic fundamentals remain supportive, global headwinds may continue to influence short-term movements.
The collective pressure from tariff fears, global corrections and aggressive foreign selling highlighted the interconnected nature of today’s markets. As investors navigate these uncertainties, attention remains focused on upcoming policy announcements, inflation readings and the direction of foreign flows, all of which will shape the market’s trajectory in the days ahead.
