Sensex and Nifty Crash: 800-Point Bloodbath as Greenland Geopolitical Tensions Flare Up

The Indian stock market witnessed a massive sell-off in early trade today, with the Sensex and Nifty crash leaving investors poorer by lakhs of crores. The BSE Sensex plummeted over 800 points to trade near the 81,300 level, while the NSE Nifty50 struggled to hold the psychological 25,000 mark, slipping about 250 points.

This "bloodbath on Dalal Street" is primarily driven by a unique and escalating Greenland geopolitical crisis, combined with a hardening stance on US trade policies that has sent shockwaves through global emerging markets.

The "Greenland Factor": A New Global Flashpoint

The primary trigger for today’s volatility is the unprecedented tension between the United States and Europe.US President Donald Trump’s renewed push to annex Greenland has met stiff resistance from the European Union (EU) and Denmark.

In retaliation, the Trump administration announced a fresh wave of Trump tariff policies, targeting EU allies who oppose the takeover.With an emergency EU summit scheduled in Brussels this Thursday, investors fear a full-blown trade war between the world’s largest economic blocs.

4 Major Reasons Why the Market is Falling Today

1. Escalating Trade War Risks

The market is pricing in the "Greenland risk." The threat of 10% to 25% tariffs on European imports has created a "risk-off" sentiment. If the EU retaliates, global supply chains—already fragile—could face significant disruptions, impacting Indian exporters indirectly.

2. US Supreme Court Stance on Tariffs

On January 20, the US Supreme Court signaled it might grant the President broad latitude under the International Emergency Economic Powers Act (IEEPA). This has fueled fears that the aggressive tariff regime is here to stay, leading to a sharp decline in export-heavy sectors like IT and Pharma.

3. Rupee at All-Time Low & FII Exodus

The Indian Rupee hit an all-time low of 91.20 against the US Dollar this morning. A weak rupee makes Indian assets less attractive to Foreign Institutional Investors (FIIs).

• FII Selling: FIIs have already pulled out over ₹29,000 crore in January 2026 alone.

• Currency Pressure: The weakening currency is squeezing margins for importers and fueling inflationary concerns.9

4. Subdued Q3 Earnings: Reliance & Banking

Heavyweights are failing to provide a cushion. Reliance Industries (RIL) reported nearly flat profit growth (0.56% YoY) for Q3 FY26, citing margin pressure in its retail and oil-to-chemical segments. Major private banks have also flagged rising credit costs, dampening sentiment in the banking index.

Market Snapshot: Winners and Losers

What Should Investors Do?

Market experts suggest that the Sensex and Nifty crash is a reaction to global "noise" rather than domestic structural failures. However, caution is advised:

• Avoid Bottom Fishing: Do not rush to buy the dip in IT stocks until the US tariff situation clarifies.

• Watch the 25,000 Mark: If Nifty stays below 25,000 for consecutive sessions, a further slide toward 24,500 is possible.

• IPO Watch: Despite the gloom, the Shadowfax Technologies IPO remains open for its second day, though retail investors should monitor subscription levels closely in this volatile environment.