The Indian stock market faced another tough day on Wednesday as the benchmark indices continued their downward slide. Sensex declined 600 points, while the broader Nifty hovered near 25,050, reflecting sustained selling pressure and cautious investor sentiment.
The market’s dip comes on the back of global uncertainty, a weak rupee, and continued foreign capital outflows. For investors tracking key indices, it was a day of volatility, sharp swings, and sector-specific movement.
Market Performance: Early Slump and Partial Recovery
Wednesday’s session began with heavy losses for Indian equities. The Sensex plunged to an intraday low of 81,124.45, down 1,056 points (1.28%), while the Nifty fell below the psychologically crucial 25,000 mark to 24,919.80, shedding 312.7 points (1.23%).
By mid-day, the market recovered slightly, with the Sensex at 81,587.89, down 592.58 points (0.72%), and the Nifty trading at 25,065.60, a drop of 166.90 points (0.66%).
The decline continues a pattern from Tuesday, when the Sensex lost 1.3% and Nifty fell 1.4%, marking their steepest single-day percentage drops in over eight months and closing at their lowest levels in three months.
Market breadth remained negative:
- Shares advancing: 1,180
- Shares declining: 2,325
- Shares unchanged: 141
Among the Nifty50 stocks, Trent, Eicher Motors, and ICICI Bank were the biggest laggards, declining up to 3%, while Tata Motors Passenger Vehicles and Power Grid Corporation of India managed small gains of around 1%.
Key Factors Behind the Market Fall
The market’s slide on Wednesday can be traced to several intertwined factors:
1. Rupee Hits Record Low
The Indian rupee continued its downward trajectory, falling 31 paise to an all-time low of 91.28 against the US dollar.
- Opening level: 91.05
- Intraday low: 91.28
Persistent dollar demand, coupled with global caution, kept pressure on the rupee. Emerging market currencies like the rupee often react sharply to global uncertainty, and this week’s geopolitical tension contributed to the depreciation.
2. Foreign Investors Remain Net Sellers
Foreign institutional investors (FIIs) continued their exit, offloading equities worth Rs 2,938.33 crore on Tuesday, marking the 11th consecutive session of net selling in January.
- Only one FII purchase this month: Rs 289.80 crore on January 2
This persistent selling weighed heavily on domestic equities, intensifying market pressure.
3. Weak Global Cues
Asian and US markets painted a cautious picture:
- South Korea’s Kospi, Japan’s Nikkei 225, and Hong Kong’s Hang Seng traded lower.
- Overnight in the US:
- Nasdaq Composite: down 2.39%
- S&P 500: down 2.06%
- Dow Jones Industrial Average: down 1.76%
Global investors reacted to renewed trade tensions and geopolitical developments, amplifying risk aversion in Indian markets.
4. India VIX Rises
The India VIX, which measures expected market volatility, rose about 4% to 13.22.
- A rising VIX signals increased uncertainty
- Investors typically reduce exposure to equities during heightened volatility
This reflects the cautious stance dominating trading sentiment on Wednesday.
5. Geopolitical Concerns
Markets remained on edge amid global uncertainties:
- US President Donald Trump’s statements on acquiring Greenland
- Threats of reviving tariffs against select European nations
Such geopolitical developments have triggered a risk-off sentiment worldwide, with investors moving towards safer assets, and the Indian market mirrored this trend.
6. Heavy Selling in Banking Shares
Banking stocks faced sharp pressure:
- Bank Nifty: down up to 1.5%
- Heavyweights such as ICICI Bank, Punjab National Bank, HDFC Bank, and State Bank of India saw cuts of up to 2%
The sector’s weakness contributed significantly to overall market losses.
7. Broader Markets Also Decline
The midcap and smallcap segments followed the benchmark indices lower:
- Nifty Midcap 100: declined up to 1.5%
- Nifty Smallcap 100: down by similar margins
The broad-based fall highlighted that the decline was not limited to blue-chip stocks but was felt across market segments.
Company-Level Highlights
- Trent, Eicher Motors, ICICI Bank: fell up to 3%
- Tata Motors Passenger Vehicles, Power Grid Corporation: rose up to 1%
The divergence indicates selective buying amid widespread caution, suggesting investors are picking pockets of stability while overall sentiment remains negative.
Summary
The Sensex decline of 600 points and Nifty near 25,050 reflects a market navigating multiple pressures: weak global cues, a falling rupee, persistent FII selling, and rising geopolitical tensions.
Investors witnessed a day of volatility, with the broader market and banking sector under stress. While some recovery occurred around noon, the indices remain below key levels, signaling continued caution and risk aversion in Indian equities.
- Sensex: down 592.58 points to 81,587.89
- Nifty: down 166.90 points to 25,065.60
- Market breadth: 1,180 advancing, 2,325 declining, 141 unchanged
- India VIX: up 4% to 13.22
- Rupee: all-time low at 91.28 against the USD
The market’s story on Wednesday was clear: a cautious, volatile environment shaped by global uncertainty and domestic pressures, leaving indices under sustained selling pressure.
Source: Moneycontrol
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