Indian equity markets witnessed a notable downturn on January 12, 2026, extending a losing streak across multiple sessions. The benchmark Sensex closed down 0.72% at 83,576.24, while the Nifty 50 fell 0.75% to 25,683.30, erasing approximately Rs 17 lakh crore in market value over six sessions. This significant dip is primarily attributed to two major factors: persistent fears of escalating US tariffs and continued heavy outflows by Foreign Institutional Investors (FIIs). Concerns over US tariffs intensified following reports of a proposed US law, the 'Sanctioning Russia Act of 2025,' backed by former President Donald Trump, which could impose a staggering 500% tariff on goods from countries, including India, that continue to trade with Russia. This comes on top of existing tariffs of up to 50% already imposed on certain Indian exports. The uncertainty surrounding US-India trade relations and the potential disruption to global trade flows severely impacted investor sentiment. Simultaneously, Foreign Institutional Investors have been consistent net sellers in the Indian market throughout January 2026, offloading equities worth over ₹11,789 crore by January 9, continuing a trend of significant outflows from 2025. This persistent FII selling, totaling nearly $1.3 billion in January alone, has further intensified the selling pressure, despite some buying support from Domestic Institutional Investors (DIIs). Analysts note that while global cues were mixed, the domestic market displayed weakness due to these external pressures, with broad-based selling observed across various sectors, particularly impacting mid-cap and small-cap shares. Upcoming quarterly earnings reports are now being closely watched for potential market direction.