MUMBAI — Indian equity benchmarks surrendered early gains to end lower on Monday, January 5, 2026, as a sharp sell-off in the information technology (IT) sector and renewed concerns over U.S. trade tariffs dampened investor sentiment.
The NSE Nifty 50 index, which touched a fresh lifetime high of 26,373.20 in early trade, reversed course to settle 0.30% lower at 26,250.30. Similarly, the S&P BSE Sensex declined by 322.39 points, or 0.38%, to close at 85,439.62.
Key Market Drags: IT and Trade Tensions
The technology sector was the primary laggard of the day, with the Nifty IT index tumbling 1.4%. Investors turned cautious ahead of the quarterly earnings season starting next week, compounded by brokerage downgrades for major players.
HCL Technologies fell 2.2% and Tech Mahindra shed 1% following downgrades by CLSA.
Infosys and Wipro also saw significant selling pressure, declining over 2% each.
Trade concerns intensified following remarks from U.S. President Donald Trump, who suggested that tariffs on Indian goods could be further increased if New Delhi does not reduce its purchases of Russian oil. The U.S. has already maintained a 50% tariff on certain Indian imports, half of which is a punitive measure linked to energy trade with Russia.
Geopolitical & Sectoral Highlights
Global uncertainty added to the volatile session, as markets reacted to reports of U.S. military action in Venezuela.
Sector/Stock Performance Reason
Nifty IT 1.43% ▼ Tariff fears & cautious pre-earnings sentiment.
HDFC Bank 2.41% ▼ Q3 update showed loan growth outpacing deposits.
Nifty Realty 2.07% ▲ Strong quarterly sales updates; Sobha surged 6%.
Nifty Auto New High Led by gains in Eicher Motors and Maruti Suzuki.
Analyst Outlook
“The year 2026 has begun with significant geopolitical shifts that are keeping investors on edge,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments. He noted that while domestic credit growth remains a fundamental strength for banks, the “unpredictability of geopolitics” and the looming tariff threats will likely keep the market in a consolidation phase in the near term.
Technically, analysts suggest the 26,300–26,350 range for the Nifty remains a stiff resistance level. A sustained move below 26,200 could trigger further corrective action toward the 26,000 mark.
