Bears tighten grip again: Sensex cracks 770 points, Nifty slips near 25,050 as Adani rout, FII exits and rupee shock spook investors
| Index | Price | Change | % Chg |
| Nifty 50 | 25,048.65 | 241.25 | -0.95% |
| Nifty Bank | 58,473.10 | 727.00 | -1.23% |
| Nifty Financial | 26,821.35 | 328.60 | -1.21% |
| BSE SENSEX | 81,537.70 | 769.67 | -0.94% |
Market sentiment turns fragile again after failed rebound
The Indian stock market failed to build on Thursday’s strong recovery and ended sharply lower on January 23, as bears returned with force. The Sensex plunged 770 points intraday and closed down 0.94% at 81,537.70, while the Nifty 50 slipped 0.95% to 25,048.65, struggling to hold the psychological 25,000 zone.
The sharp reversal underlined just how fragile sentiment remains, despite brief optimism earlier in the week on easing geopolitical tensions.
Markets opened in the green but quickly lost momentum as selling intensified across sectors, dragging indices close to the day’s low by the close.
Also Read : Rupee Slides to Fresh Record Low of 91.95/$ — What’s Driving the Fall Now
Here’s what happened today and why traders reacted
Traders tracked three immediate developments that changed intraday mood sharply:
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Heavy selloff in Adani group stocks after US SEC developments
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Continued foreign institutional investor (FII) selling for the 13th straight session
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Rupee hitting a fresh lifetime low near 92 per dollar, spooking global allocators
The market had attempted to stabilise in early trade, but once Adani stocks collapsed and the rupee weakened further, short-term traders rushed to cut risk, accelerating the fall.
By afternoon, selling had broadened from select stocks to banks, autos, metals, realty and midcaps, signalling a clear risk-off shift.
Adani selloff emerges as the biggest drag on indices
The steep fall in frontline indices was driven largely by heavy liquidation in Adani stocks.
Adani Enterprises crashed 10.76%, while Adani Ports fell 7.02%, as reports emerged that the US Securities and Exchange Commission has sought court approval to personally email summons to Gautam Adani and executive Sagar Adani in connection with alleged fraud and a $265 million bribery probe.
The scale of the fall had ripple effects across broader sentiment, particularly among retail traders who were active in these names.
Market participants noted that such sharp declines in heavyweight stocks often act as psychological triggers, leading to broader de-risking.
Persistent FII selling continues to cap any meaningful recovery
Foreign investors remain firmly on the sell side.
FIIs offloaded ₹2,549.80 crore worth of equities on Thursday, marking the 13th straight session of net selling in January. They have been buyers only once this month — on January 2.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, explained why this trend is unlikely to reverse soon:
“The FII stance towards India will be determined by the trend in corporate earnings. Higher earnings growth alone can ensure sustained buying by FIIs since they have the option to invest in markets where valuations are cheaper and earnings are better. Since earnings growth is sometime away, the market remains heavily net short.”
This explains why every small rally is getting sold into rather than extended.
Rupee hitting lifetime low adds another layer of discomfort
Currency markets also added to the gloom.
The rupee slid to a fresh lifetime low of 91.99 per dollar intraday, before closing near 91.94. For the week, the rupee is now down 1.18%, and for January, down 2.3%.
“This is largely a repeat of what we saw through most of 2025. The rupee stays under pressure regardless of broader cues,” said Kunal Kurani, Vice President at Mecklai Financial Services.
Despite repeated intervention by the RBI — including spot dollar selling and buy/sell swaps — the underlying trend remains negative due to:
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FII equity outflows
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Heavy importer hedging
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Slower exporter dollar selling
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Weak equity market sentiment
For equity investors, a falling rupee raises concern over foreign flows, imported inflation and macro stability.
Market breadth confirms widespread risk-off behaviour
Friday’s decline was not limited to a few large stocks — the broader market was clearly weaker.
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Decliners: 2,301 stocks
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Advancers: 880 stocks
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New 52-week lows: 378 stocks
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High volatility continued despite India VIX easing 6.31% to 14.19
Midcap and smallcap indices both fell nearly 2%, indicating that risk appetite has weakened significantly across retail and HNI segments.
Top losers show panic-like selling in momentum stocks
The damage was concentrated in popular retail and momentum names.
Top Losers:
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Adani Enterprises (-10.76%)
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Adani Ports (-7.02%)
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Eternal (-5.74%)
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IndiGo (-3.95%)
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Jio Financial (-3.58%)
Top Gainers (defensive buying only):
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Dr Reddy’s (+1.72%)
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ONGC (+0.86%)
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Tech Mahindra (+0.79%)
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Hindalco (+0.69%)
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Hindustan Unilever (+0.64%)
The fact that only defensives and exporters gained reinforces that investors are moving to safety rather than risk-taking.
Technical charts flash warning: structure now clearly weak
From a chart perspective, the session caused serious technical damage.
Nifty has now:
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Closed below its 200-day moving average
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Formed a large bearish candle on daily and weekly charts
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Confirmed a lower-top reversal near 25,400
According to analysts, the near-term downside target now shifts to 24,700–24,600, while resistance is placed near 25,200–25,400.
Ruchit Jain of Motilal Oswal Financial Services warned:
“The short-term trend is clearly negative. Until Nifty regains 25,400 decisively, traders should remain cautious. The structure suggests continuation of the downtrend.”
Earnings disappointment adds to negative undertone
Beyond macro and flows, corporate earnings have also failed to inspire confidence.
Weak results and guidance from heavyweights such as ICICI Bank and HCL Technologies have contributed to the feeling that earnings growth is not yet strong enough to justify premium valuations.
This is particularly relevant because FII flows are strongly correlated to earnings trajectory rather than domestic liquidity.
What this means for traders in the coming sessions
For short-term traders:
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Volatility likely to remain elevated
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Selling pressure may continue on rallies
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Stocks with high retail participation could see sharper swings
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Key levels to watch: Nifty 25,200 (resistance), 24,700 (support)
Momentum traders are increasingly shifting towards intraday trades rather than positional bets, reflecting lack of conviction.
What this means for long-term investors
For long-term investors, this phase requires patience rather than panic.
Positives still exist:
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Domestic economy remains resilient
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Q3 earnings are mixed but not disastrous
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Structural themes like capex, defence, energy transition remain intact
However, risks that need monitoring:
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Continued FII selling
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Rupee weakness
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Geopolitical unpredictability
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Corporate governance headlines (like Adani impact)
A staggered investment approach remains more prudent than aggressive lump-sum buying.
Ban list expands as speculative activity rises
The F&O ban list also reflects increased speculative positioning.
Stocks currently in ban include:
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Bandhan Bank
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Sammaan Capital
Several high-activity names like IRCTC, IEX, RVNL, Dixon, BHEL, NBCC, IREDA and others remain close to MWPL limits, indicating elevated trader participation even amid weak markets.
This typically leads to sharp stock-specific volatility, which traders must handle with strict risk management.
The bigger message from the market
Friday’s selloff was not just about one headline. It reflects a market struggling to find stable footing amid:
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Weak global risk appetite
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Foreign outflows
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Currency pressure
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Patchy earnings
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Loss of technical structure
Until flows stabilise and earnings visibility improves, every rally may remain vulnerable to sharp selling.
FAQs Bears Tighten Grip Again
Q. Why does the stock market fall even after positive global news?
Markets often price in good news in advance. When investors feel valuations are stretched, foreign investors are selling, or earnings growth is uncertain, even positive headlines fail to sustain rallies. Profit booking and lack of strong domestic triggers can outweigh global optimism.
Q. How does continuous FII selling impact retail investors’ portfolios in India?
Persistent FII selling usually weakens large-cap stocks, banking shares and indices like Sensex and Nifty. This indirectly hurts mutual funds and long-term portfolios, even when retail investors themselves are not selling.
Q. Why does a falling rupee put pressure on Indian stock markets?
A weakening rupee increases foreign investors’ risk because their dollar returns shrink. It also raises import costs for companies, hurts profit margins, and makes India less attractive compared to other emerging markets.
Q. Are sharp intraday recoveries a sign that the market bottom is near?
Not always. Many sharp recoveries during weak phases are technical bounces or short-covering rallies. A real bottom usually forms only when volumes stabilise, earnings improve, and foreign selling slows.
Q. How should long-term investors behave during high-volatility market phases?
Instead of reacting emotionally, long-term investors should focus on staggered investing (SIP or phased buying), avoid overexposure to momentum stocks, and prioritise fundamentally strong businesses with stable earnings.
Q. Why do midcap and smallcap stocks fall more than large caps during market corrections?
Midcap and smallcap stocks carry higher risk and more retail participation. When sentiment turns negative, liquidity dries up quickly in these segments, leading to sharper price declines than in large-cap stocks.
Q. How can traders use levels like 25,000 on Nifty for better decision-making?
Psychological levels like 25,000 often act as support or resistance. If Nifty sustains above such levels, it signals strength. If it consistently breaks below, traders usually become cautious and reduce long positions.
