Multiple domestic and global factors combined to push Indian equities deeper into the red:
1. Global risk-off sentiment
Fresh geopolitical tensions linked to former US President Donald Trump’s renewed Greenland annexation rhetoric and tariff threats against Europe triggered a wave of risk aversion across global markets. Wall Street posted its steepest single-day fall in three months, setting a weak tone for Asian equities.
2. Persistent foreign investor selling
Foreign institutional investors (FIIs) extended their selling streak to the eleventh consecutive session. On January 20 alone, overseas investors sold Indian equities worth nearly ₹2,938 crore. Although domestic institutional investors (DIIs) stepped in with net purchases of around ₹3,666 crore, their buying was not enough to offset foreign outflows.
3. Rupee hits record low
The Indian rupee slipped to a fresh all-time low of 91.35 against the US dollar, adding pressure on equity markets. A weaker currency raises concerns over imported inflation and foreign fund withdrawals, especially during periods of global uncertainty.
4. Weak and uneven earnings
Patchy third-quarter earnings from several sectors failed to provide support. Stocks in technology, consumer durables, chemicals, and midcaps came under heavy selling, reflecting cautious expectations around near-term growth.
5. Technical breakdowns
From a technical perspective, the Nifty breaking below 25,000 and several stocks slipping under their 200-day moving averages triggered fresh selling by traders. Charts now point to further downside risks unless markets stabilise quickly.
