Stock markets felt the tremor of Donald Trump’s threat to hike traiff rates with both Sensex and NIfty falling from days’ high. At the time of writing this piece, Sensex is trading one percent down. Twelve of the 13 major sectors logged losses. Even the more domestically-focussed smallcaps and midcaps fell about 1.7% each.

Investors around the world took stock of U.S. President Donald Trump, who soon after assuming office on Monday, said his administration was mulling imposing 25% tariffs on Mexico and Canada as soon as Feb. 1. Market sentiment “remains fragile” on Trump’s policy announcements, said Satish Chandra Aluri, an analyst at Lemonn Markets Desk.

Trump’s tariff decisions remain a wildcard for Indian markets, said Prashant Tapse, senior vice president of research at Mehta Equities, adding that uncertainty over his tariff plans for India has led to caution among investors. The U.S. policy framework under Trump could impact the strength of the dollar and Treasury yields, as well as raise inflation, which could mean fewer interest rate cuts.

That, consequently, could draw foreign flows away from emerging markets such as India. Indeed, foreign portfolio investors (FPI) have sold Indian stocks and bonds worth about $6.7 billion so far in January. Among sectors, financials lost 1%, dragging the markets lower. They had gained 1.4% in the previous session.

Among individual stocks, online food delivery platform Zomato lost 11%, extending its drop from the previous session, after posting a slump in its December-quarter profit. Sunteck Realty climbed 5.4% after swinging to a quarterly profit from a year-ago loss. Pharmaceutical company Venus Remedies rose 5% after renewing its European good manufacturing practices certification.