Sensex and Nifty News: Sensex Drops 1,400 Points in Two Days as Indian Market Faces Heavy Selling

The Indian stock market witnessed significant turbulence over the past two days, with investors feeling the weight of global and domestic pressures. Both the Sensex and Nifty 50 faced sharp declines, reflecting cautious sentiment amid trade war concerns, mixed corporate earnings, and upcoming policy events.

Market Performance at a Glance

• Sensex: Fell over 1,200 points (1.5%) to an intraday low of 82,010.58 on January 20.
  • Closed at 82,180.47, down 1,066 points (1.28%).
• Nifty 50: Dropped to 25,171.35 intraday; closed at 25,232.50, down 353 points (1.38%).
• BSE Midcap Index: Declined 2.52%.
• BSE Smallcap Index: Plunged 2.74%.
• India VIX: Jumped nearly 8%, signaling higher expected market volatility.

Over two consecutive sessions, the Sensex has lost 1,390 points (1.7%), while the Nifty 50 has declined 1.8%. Investors saw nearly ₹12 lakh crore wiped off market capitalization, which fell from ₹468 lakh crore on Friday to ₹456 lakh crore.

Sector-Wise Performance

Market weakness was broad-based, with multiple sectors witnessing sharp corrections:

• Nifty Realty: Dropped over 5%.
• Consumer Durables: Fell 3%.
• Auto, IT, Metal, Pharma: Each declined around 2%.
• Nifty Bank: Down 0.81%.
• Financial Services: Declined 1.16%.

These losses indicate that both growth and defensive sectors were under pressure, as investors rebalanced their portfolios amid uncertainty.

Factors Driving the Market Down

Several key elements contributed to the steep declines in the Indian stock market:

1. Global Trade Tensions

Trade concerns resurfaced as geopolitical risks escalated. Reports highlighted potential US tariffs on Europe worth $108 billion if disagreements over Greenland acquisitions proceed.

Such global tensions have created uncertainty, influencing Indian markets as investors monitor potential impacts on trade and capital flows.

2. Mixed Q3 Corporate Earnings

Q3 results have been uneven, with companies reporting largely stable numbers but few positive surprises.

• Certain sectors, like automobiles, showed continued growth, but broader market sentiment remained subdued.
• Investors have not seen widespread earnings surprises to offset other concerns, adding to the cautious mood.

3. Foreign Institutional Investor (FII) Selling

Foreign investors have continued to withdraw funds from Indian equities:

• January outflows so far: Over ₹29,000 crore in the cash segment.

The consistent selling pressure from FIIs has contributed to the broader market decline, especially in large-cap stocks.

4. Shift to Safe-Haven Assets

Amid heightened risks, investors are moving funds toward safer assets such as gold and silver.

• Precious metals have seen strong rallies, prompting profit booking in stocks.
• This trend reflects a preference for capital preservation during volatile periods.

5. Upcoming Union Budget 2026

The market is also factoring in the Union Budget scheduled for February 1.

• Speculation on fiscal policies and government capital expenditure has made investors cautious.
• Markets are closely watching for announcements related to economic growth, employment, and consumer demand.

Summary of the Market Slide

The Indian market’s recent downturn has been marked by heavy selling and broad sectoral declines:

• Sensex: Lost over 1,390 points in two sessions.
• Nifty 50: Fell 1.8% to 25,232.50.
• Market capitalization: Declined by ₹12 lakh crore in two days.
• Volatility: India VIX surged 8%, indicating turbulent trading ahead.
• Sectors hit hardest: Realty, Consumer Durables, Auto, IT, Metal, and Pharma.

Overall, the market remains sensitive to global trade tensions, corporate earnings, FII flows, safe-haven asset demand, and Budget 2026 expectations.

Source: Livemint