Indian Markets Open in the Red on Tuesday: Sensex Falls 700 Points

Indian equity benchmarks started the trading week on a cautious note on Tuesday, May 12, 2026, with both the BSE Sensex and Nifty50 slipping in early deals. The decline mirrored mixed but largely subdued trends across Asian markets, as investors weighed the impact of government austerity measures and rising global crude oil prices.

The BSE Sensex dropped around 700 points to touch 77,300 levels in intra-day trade. The Nifty50 similarly shed about 200 points to hover near 23,600. Market participants appeared wary despite a mildly positive close in US indices the previous night.

Mixed cues from Asian peers

Trading in the region remained uneven. South Korea’s KOSPI fell sharply by 1.52 per cent to 7,725, reflecting broader risk aversion. Japan’s Nikkei, however, gained 0.62 per cent to 62,805, while Hong Kong’s Hang Seng rose modestly by 0.29 per cent to 26,489. This mixed performance added to the hesitant mood back home.

Back-to-back selling by foreign investors has also contributed to the pressure. Foreign Institutional Investors (FIIs) offloaded shares worth ₹18,724 crore over the last seven days, data showed. In contrast, Domestic Institutional Investors (DIIs) continued to provide support with net buying of nearly ₹5,940 crore in the recent session and over ₹19,966 crore in the past week.

Monday’s sharp sell-off

The weakness on Tuesday followed a heavy sell-off the previous day. On Monday, May 11, the Sensex had tumbled 1,313 points to close at 76,015, while the Nifty50 dropped 360 points to settle at 23,815. Persistent concerns over fiscal tightening and elevated oil costs weighed on sentiment.

Rising oil prices and austerity concerns

Analysts pointed to multiple global and domestic factors. Crude oil prices have been climbing, raising worries about India’s import bill and inflation outlook. At the same time, reports of government austerity measures aimed at controlling expenditure have created uncertainty among market players regarding growth-supportive spending in the coming months.

A dealer at a domestic brokerage noted that participants were adopting a wait-and-watch approach ahead of key global cues and upcoming domestic data releases. “The combination of FII outflows and commodity price volatility is keeping the market under check,” he said, requesting anonymity.

Broader market breadth

Most sectoral indices opened lower, with banking, energy, and auto stocks facing selling pressure. IT and select FMCG counters showed relative resilience. Market breadth remained negative, with more stocks declining than advancing on the BSE.

Global markets overnight

Wall Street ended on a positive note on Monday. The Dow Jones Industrial Average rose 95 points to 49,704, the S&P 500 gained 14 points to 7,413, and the Nasdaq Composite added 27 points to 26,274. These marginal gains offered limited comfort to Indian investors amid Asia’s mixed signals.

What lies ahead

Traders will now watch global oil movements, the rupee’s trajectory, and any fresh cues on government spending plans. The coming sessions are expected to remain range-bound unless fresh triggers emerge. Experts suggest that sustained DII buying could limit downside, but FII flows and global risk appetite will play a decisive role.

The market mood reflects a balance between caution over near-term headwinds and underlying confidence in domestic economic resilience. Investors remain focused on how policymakers navigate the current global uncertainties.

Indian stock markets cheered the landmark India-EU Free Trade Agreement (FTA) today, with Sensex rises by 487 points in its second straight session of gains. On Wednesday, January 28, 2026, the BSE Sensex settled at 82,344.68, while the NSE Nifty closed at 25,342.75, up 167 points. This rally comes hot on the heels of the FTA signing at the 16th India-EU Summit, sparking optimism for trade and growth.

India-EU FTA: The Big Market Catalyst

After 18 years of talks, India and the 27-nation EU bloc sealed the deal on Tuesday. Union Minister Piyush Goyal called it a "strong and independent" pact between the world's fourth-largest economy (India) and the second-largest (EU). Together, they represent 25% of global GDP and one-third of world trade. Experts say this India-EU FTA could slash tariffs, boost exports in sectors like autos, pharma, and IT, and attract fresh investments—making it a game-changer amid global uncertainties.

"Why now? With US markets volatile and geopolitical tensions rising, this FTA positions India as a reliable trade hub," notes market analyst Rajesh Mishra. Investors are betting on easier EU access, driving today's bullish sentiment.

Mixed Global Cues, But Local Strength Shines

Asian markets showed a split picture: Korea's KOSPI up 1.05% at 5,138, Hong Kong's Hang Seng surging 2.21% to 27,725, and China's Shanghai Composite gaining 0.49% at 4,160. Japan's Nikkei dipped 0.58% to 53,024. In the US, January 27 saw Dow Jones fall 0.83% to 49,003, while Nasdaq rose 0.91% and S&P 500 gained 0.41%.

Domestically, Tuesday's session set the tone—Sensex up 319 points to 81,857, Nifty adding 126 to 25,175.

FII Selling Offset by DII Buying Spree

Foreign Institutional Investors (FIIs) sold ₹3,068 crore worth of shares on January 27, continuing December 2025's net outflow of ₹34,350 crore. But Domestic Institutional Investors (DIIs) countered strongly, netting ₹8,999 crore that day and ₹79,620 crore for December. This DII support has kept Nifty today resilient.

• Key Gainers: Banking and IT stocks led, with HDFC Bank and Infosys shining.
  
  

• Practical Tip: Long-term investors should eye export-focused firms benefiting from India-EU FTA.
  
  

In conclusion, as Sensex rises amid FTA euphoria, markets signal confidence in India's global push. Watch for Q4 earnings and US Fed cues next. Stay tuned for Nifty today updates.