Monday saw a steep decline in the Indian stock market as the benchmark indexes were heavily pressured to sell due to persistent foreign capital outflows, unclear US trade policy, and negative global signals.

The declaration by US President Donald Trump of a 25% tax on all Colombian products entering the nation was one of the primary causes of the decline.

Fears of a possible escalation in international trade wars have been raised by this action, which was taken in reaction to Colombia’s decision to halt US military deportation flights.

The next Federal Open Market Committee (FOMC) meeting, which is set for January 28–29, is contributing to the cautious mood.

Concerns about Trump’s economic initiatives, such as prolonged tax cuts and tariffs, are causing discussion about potential rate reduction in March, even though economists estimate that the Fed will likely hold interest rates during this meeting.

Investor confidence has been severely damaged by withdrawals of foreign funds and weak third-quarter results from Indian businesses.

Uncertainty was further increased by worries that Chinese DeepSeek’s affordable AI model might interfere with the operations of IT behemoths like Nvidia and Google.

With US stock futures trading down during Asian trade hours, global markets offered little assistance. Futures for the S&P 500 lost 1%, while futures for the Nasdaq 100 declined 1.9%.

Mixed attitudes were echoed in Asian markets. Japan’s Nikkei 225 futures fell 0.6%, while Hong Kong’s Hang Seng Tech Index gained 2%.

Shares of SoftBank Group slumped 5.4% in Tokyo, while shares of Advantest Corporation, a supplier to Nvidia, sank 8.6%.

While the NSE Nifty fell 265.35 points, or 1.14 percent, to break through the 22,850 mark and reach 22,826.85, the BSE Sensex fell 842.4 points, or 1.1%, to reach an intraday low of 75,348.06.

The indexes were still down, with the Sensex down 772 points and the Nifty down 249 points at 2:30 p.m., despite a minor recovery later in the day.