Rs 10 lakh crore wiped out as bloodbath in the equity market continues 

The latest fall is attributed to weak global cues and uncertainty surrounding US trade policy under the new president Donald Trump.
US tech stock heavy index Nasdaq (future) was under pressure ahead of the earnings season.
US tech stock heavy index Nasdaq (future) was under pressure ahead of the earnings season.
Updated on
2 min read

In yet another bearish session, India’s equity market benchmarks – BSE Sensex and NSE Nifty – plummeted by more than 1% each, causing widespread concern among investors. At close, the Sensex was down 824.29 points or 1.08% at 75,366.17, and the Nifty fell 263.05 points or 1.14% to settle at 22,829.15.

A bigger pain was seen in the broader market as the NIFTY Midcap 100 index fell 2.75% and the smallcap index cracked nearly 4%. Owing to Monday’s fall, investors lost about Rs 10.50 lakh crore in a single session as the overall market capitalisation (m-cap) of BSE-listed firms came down to Rs 410.31 lakh crore from Rs 420.86 lakh crore in the previous session. 

Monday’s fall is attributed to weak global cues and uncertainty surrounding US trade policy under the new president Donald Trump. US tech stock heavy index Nasdaq (future) was under pressure ahead of the earnings season. Further, the launch and immense popularity of a free, open-source AI model by Chinese startup DeepSeek is being seen as a threat to large US tech players by investors.

Additionally, foreign institutional investors (FIIs) continue to exit India and corporate earnings so far in Q3FY25 have been below street estimate. FIIs have been on a selling spree October last year. So far in January, they have offloaded over Rs 69,000 crore in Indian equities till January 24.

"Broad-based selling across sectors plummeted the Indian market amidst tepid earnings and weak sentiments across the globe. Mid and small-caps remained in their downward trajectory over expensive valuations. FIIs are on a selling spree due to moderation in economic growth and INR depreciation,” said Vinod Nair, Head of Research, Geojit Financial Services.

He added, “The weak sentiments were further exacerbated as the US trade confrontation continued, like with Colombia this time. Heightened volatility is here to stay this week ahead of the upcoming events like the FOMC meeting, expiry week, and Union budget."

The volatility index, INDIA VIX, rose by 8.28% settling at 18.13, signaling increased market volatility.

“From a technical perspective, Nifty formed a bearish red candle on the daily chart, indicating weakness. However, the index managed to hold above the trendline support near 22,780 levels. A breakdown and sustained trading below this level could push the index further down toward 22,500,” said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Intermediates Ltd.

Investors would now be keenly watching two major events of the week – the Budget 2025 and the FOMC meeting. Deepak Ramaraju, Senior Fund Manager at Shriram AMC said that a populist budget may strain the fiscal deficit and result in further weakness in the rupee, leading to lower rate cuts and delays in economic growth. 

“Any miss on the fiscal prudence or lower growth guidance may trigger a further selloff in the markets," added Ramaraju. 

The US Federal Open Market Committee (FOMC) meeting is scheduled for January 28-29. The street would be keenly watching the Fed’s stance on interest rate cuts. 

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