The stock market logged its worst weekly fall in three months over fresh fears on the tariff front from the US after President Donald Trump approved the ‘Sanctioning Russia Act of 2025’ bill which calls for increasing the import tax to at least 500 per cent on goods as well as services from countries “that knowingly engage in the exchange of Russian-origin uranium and petroleum products”.
The benchmark Nifty50 index, which fell over 1 per cent on Thursday, ended 193.55 points or 0.8 per cent lower on Friday, closing out the week at 26,683.30, down 2.4 per cent. Analysts said investors likely took the uncertainty as an opportunity to book some profits after benchmark indices had raced to a fresh high earlier this month.
“Domestic markets fell from all-time highs on profit taking amid rising global tensions and fresh round of tariffs threats over Russian oil purchase,” said Vipin Kumar, assistant VP of equity research at Globe Capital Market. According to VK Vijaykumar, investment strategist at Geojit Financial Services, the stock market in the short run “will be swayed more by sentiments than fundamentals”. “In recent days, particularly after President Trump’s moves in Venezuela and the US capture of a Russian-linked oil tanker, geopolitical uncertainty has spiked,” Vijaykumar added.
The India Volatility Index, or VIX — a barometer of market uncertainty — surged nearly 16 per cent this week to end at a one-month high.
The Sanctioning Russia Act of 2025 bill could be put to vote in the US Congress next week, with Republican Senator Lindsey Graham saying potential targets include India and China, among others. Market sentiment further darkened due to comments by US Commerce Secretary Howard Lutnick on Friday that India did not respond in time to a trade deal offered by the US. “It was all set up. But you had to have Modi (Prime Minister Narendra Modi) call President Trump. They (India) were uncomfortable doing it. So Modi didn’t call,” Lutnick said on a podcast.
India’s external affairs ministry, however, said Lutnick’s characterisation of the negotiations was “not accurate”.
India was one of the first countries to broach talks of a trade deal with the US in early 2025. However, negotiations stalled after the imposition of a penal 25 per cent tariff in late August, only to resume later. While some analysts think the stock market may now be discounting the possibility of a deal being struck, Kumar of Globe Capital Market sees the current actions as “delaying tactics” by the US as it mulls over the new Russia sanctions bill.
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Oil and gas stocks were among the worst hit this week, with the Nifty Oil & Gas index falling nearly 6 per cent. Reliance Industries, which has the highest weight in the sectoral index, fell 7.3 per cent during the week, with the oil major saying it did not expect to import any Russian oil in January. Other oil companies such as Bharat Petroleum, Indian Oil, and Hindustan Petroleum also fell 6-10 per cent. These companies will be among the most impacted from not being able to import cheaper crude oil from Russia. While Indian oil companies have already vastly reduced their exposure, some state-owned refiners are still buying Russian crude, reports said.
Higher prices, which means higher raw material costs for refiners, also hurt these companies, with Brent crude oil prices up nearly 4 per cent over the past couple of days after Trump threatened to intervene in Iran, like in Venezuela.
The Nifty Bank was down 1.5 per cent compared to last week — private sector lender HDFC Bank fell 7.1 per cent amid concerns about weak business growth after its loans and deposits were up just 2.7 per cent and 2.1 per cent, respectively, as at the end of December 2025 compared to a quarter ago, as per data disclosed to the exchanges Monday.
“We believe constrained deposit growth has weighed on loan growth this quarter as its CD (credit-deposit) ratio almost touched 100 per cent mark. Strong deposit mobilisation remains key for the bank to drive acceleration in loan growth going forward,” Japanese brokerage Nomura said in a note.
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