Indian stock markets extended their slide for a second straight session on Tuesday, January 20, as global trade tensions, weak earnings signals and heavy foreign selling kept investors on edge.
In just two sessions, the Sensex has lost more than 1,390 points, or about 1.7 percent, while the Nifty 50 has fallen close to 1.8 percent. Investor wealth eroded by nearly ₹12 lakh-crore over these two days.
• The Sensex dropped over 1,200 points on Tuesday to hit an intraday low of 82,010 before closing 1,066 points, or 1.28 percent, lower at 82,180.
• The Nifty 50 slipped below the 25,200 mark during intraday trade and finally ended at 25,232, down 353 points, or 1.38 percent.
• Broader markets were hit harder, with the BSE Midcap index falling 2.52 percent and the Smallcap index plunging 2.74 percent.
• Market volatility spiked, with India VIX rising nearly 8 percent, signalling continued nervousness in the near term.
• Realty stocks led the fall, with the Nifty Realty index crashing over 5 percent.
• Consumer durables declined about 3 percent.
• Auto, IT, metal and pharma stocks fell around 2 percent each.
• Banking and financial stocks also weakened, though losses were relatively contained.
Global markets have turned risk-averse after fresh geopolitical tensions involving the US and Europe. US President Donald Trump’s threat to impose tariffs on several European countries over the Greenland issue has raised fears of a renewed trade war. This uncertainty has pushed investors to cut exposure to equities.
Corporate earnings for the December quarter have been largely stable but uninspiring. The one-time impact of new labour codes has weighed on profitability in some sectors, and the lack of positive surprises has failed to lift sentiment already dented by global concerns.
Foreign institutional investors continue to pull money out of Indian equities. In January so far, FIIs have sold shares worth over ₹29,000 crore in the cash market, driven by concerns over the rupee’s weakness, valuation mismatches and uncertainty around India-US trade relations.
With geopolitical and economic risks rising, investors are increasingly moving money into safer assets. Record highs in gold and silver have encouraged profit-taking in equities, further pressuring stock prices.
Markets are also in a wait-and-watch mode ahead of the Union Budget on February 1. While expectations are high for growth-boosting measures, concerns that tighter fiscal discipline could limit government spending are adding to investor caution.
With global risks unresolved and domestic triggers awaited, experts expect volatility to remain elevated in the near term.
