Bears stay in control as Nifty cracks key levels, rupee hits record low and investors brace for more volatility
| Index | Price |
Change |
% Chg |
| Nifty 50 |
25,157.50 |
75.00 |
-0.30% |
| Nifty Bank |
58,800.30 |
603.90 |
-1.02% |
| Nifty Financial |
26,963.50 |
237.10 |
-0.87% |
| BSE SENSEX |
81,909.63 |
270.84 |
-0.33% |
Indian equity benchmarks extended losses for the third consecutive session on January 21, reflecting persistent nervousness driven by weak global cues, a sharply weaker rupee and continued foreign investor selling.
The Sensex closed 271 points lower at 81,909.63, while the Nifty 50 slipped 75 points to settle at 25,157.50, after briefly dipping below the psychologically important 25,000 mark intraday for the first time in nearly four months.
Although bargain buying helped indices recover from the day’s lows, market participants said the bounce looked tactical rather than structural, with sentiment still tilted towards caution.
The broader markets again underperformed. Midcap and smallcap indices declined about 1 percent each, indicating that risk appetite remains subdued beyond frontline stocks.
Also Read : Rupee Hits Fresh Record Low of 91.74/$ — FII Selling Accelerates, Global Tensions Add Pressure
Rupee at record low adds fresh layer of anxiety
A major pressure point for the session was the currency market. The Indian rupee touched a fresh all-time low of 91.74 per dollar during the day and eventually closed near 91.70, compared with its previous close of 90.97.
The sharp depreciation intensified concerns across Dalal Street, especially for sectors dependent on imports and foreign capital flows.
“The rupee crashed to a record low amid heightened geopolitical uncertainty and persistent foreign fund outflows. This kind of currency weakness inevitably feeds into equity sentiment,” said market participants tracking both currency and equity desks.
So far in January, the rupee has already fallen about 1.5 percent, and it has now emerged as the second worst-performing Asian currency in 2026, underscoring the scale of pressure.
Here’s what happened today and why traders reacted
Traders pointed to three developments that shaped market behaviour through the day:
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Nifty slipping below 25,000 intraday triggered fresh caution and short-term stop-losses
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The rupee’s fall to a lifetime low amplified concerns around foreign flows and macro stability
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Persistent FII selling and weak global cues prevented any sustained recovery after the mid-session bounce
While some value buying emerged around the 24,900–25,000 zone, dealers said most institutional desks remain in “wait-and-watch” mode rather than aggressive accumulation.
Investors lose nearly Rs 14 lakh crore in three sessions
The cumulative damage over the last three sessions has been significant. Market data shows that nearly Rs 13.68 lakh crore of investor wealth has been eroded during this short correction phase.
The total market capitalisation of BSE-listed companies has fallen to around Rs 454.15 lakh crore, highlighting how quickly sentiment has turned cautious after weeks of volatility.
“Today’s recovery from the lows does not yet signal a trend reversal. It looks more like tactical buying in beaten-down names,” said a senior dealer at a domestic brokerage.
Sectoral performance shows broad-based pressure
Sectorally, the market remained under pressure across most pockets. Only metal and oil & gas indices managed to end marginally in the green, while the rest closed lower.
The worst-hit sectors included:
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Consumer Durables
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Realty
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FMCG
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Pharma
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Media
Banking stocks also saw selling pressure, with heavyweight names like ICICI Bank, HDFC Bank and PSU lenders weighing on the Bank Nifty.
Top stock movers show selective buying amid broader caution
Despite the weak undertone, selective stocks saw strong action on both sides.
Top gainers of the session included:
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Eternal (+4.90%)
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IndiGo (+1.40%)
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Max Healthcare (+1.32%)
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JSW Steel (+1.28%)
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Hindalco (+1.28%)
Top losers included:
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ICICI Bank (-2.10%)
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Trent (-1.98%)
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Tata Consumer (-1.69%)
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BEL (-1.50%)
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HDFC Life (-1.24%)
Market breadth remained negative, with declining stocks significantly outnumbering advancers, a sign that broader sentiment is still cautious.
Seven key factors dragging the market lower
Market participants broadly attributed the ongoing weakness to a combination of domestic and global factors.
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Rupee at record low: Currency weakness has heightened fears of foreign outflows and imported inflation
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Persistent FII selling: Foreign investors sold nearly Rs 2,938 crore in the previous session, marking the 11th selling day in January
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Weak global cues: Asian markets were mostly lower, while US indices fell sharply overnight
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Geopolitical tensions: Concerns around Trump’s Greenland stance and renewed tariff threats have pushed global markets into risk-off mode
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Rising volatility: India VIX jumped over 8 percent to around 13.78, reflecting growing nervousness
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Selling in banking stocks: Bank Nifty slipped as heavyweight lenders faced pressure
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Broader market weakness: Midcaps and smallcaps continue to see steady distribution
“There is risk-off sentiment in global markets now in response to Trump’s Greenland policy and threatened tariffs. Investors are clearly moving toward caution,” said V K Vijayakumar, Chief Investment Strategist at Geojit Investments.
Technical structure signals fragile undertone
From a technical perspective, analysts said the market structure remains weak despite the intraday recovery.
A small indecisive candle has formed on the daily chart, indicating volatility rather than strength. According to technical experts, Nifty is struggling to sustain above the 25,150 zone, which coincides with key moving averages.
“The underlying trend remains weak. If Nifty slips below 24,900 again, the next downside levels could open toward 24,500. A sustainable move above 25,200 is required for any meaningful short-term recovery,” said one technical analyst tracking the index.
This suggests traders may continue to adopt a sell-on-rise approach rather than aggressive dip buying.
What this means for investors and portfolios
For investors, the current phase highlights the importance of discipline rather than panic.
Market experts suggest the following portfolio implications:
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Avoid aggressive lump-sum buying during volatile phases
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Focus on quality largecaps with strong earnings visibility
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Export-oriented sectors like IT and pharma could benefit if the rupee remains weak
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Highly leveraged or speculative midcap stocks may remain under pressure
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Maintaining higher cash levels offers flexibility if deeper corrections emerge
While long-term investors may gradually accumulate on sharp declines, most experts believe the near-term environment still calls for caution.
Ban list and derivatives activity adds to stock-specific volatility
In the derivatives segment, stocks such as SAMMAANCAP and SAIL remain in the F&O ban list, while several stocks including IRCTC, IEX, RVNL, RBL Bank, IREDA, BHEL and Godrej Properties are hovering close to the MWPL threshold.
Traders said elevated derivatives activity in these counters could lead to higher stock-specific volatility, even if broader indices remain range-bound.
Bigger picture: sentiment-driven fall, not a fundamental collapse
Despite the sharp correction over three sessions, many strategists believe this phase reflects sentiment compression rather than a breakdown of fundamentals.
Global brokerages continue to remain constructive on India’s medium-term story, citing strong domestic demand, improving capex cycle and policy stability. However, they also agree that near-term direction will depend heavily on global cues, currency stability and FII behaviour.
For now, the message from the market is clear: volatility is back, confidence is fragile, and investors may need to prioritise patience over aggression in the sessions ahead.
Stocks in NSE F&O Ban List Today
Two stocks are currently in the NSE F&O ban list after crossing the market-wide position limit (MWPL) threshold. These are SAMMAANCAP and SAIL. Since these stocks have breached 95 percent of the MWPL, traders are not allowed to take fresh positions and can only reduce or square off existing positions.
Stocks Close to Entering the F&O Ban Zone
Several actively traded stocks are now hovering close to the ban threshold, which makes them vulnerable to sudden restrictions and sharp volatility. Among the key names on the watchlist are IRCTC, IEX, RVNL, RBL Bank, IREDA, Dixon Technologies, Bandhan Bank, NBCC, BHEL, Godrej Properties, IRFC, Mazagon Dock, HUDCO, Biocon, Angel One, CDSL, DLF, MCX, Tata Technologies, PNB, Exide Industries, Tata Elxsi, Jio Financial, Polycab, Wipro, Adani Enterprises and Jubilant FoodWorks, among others.
Why the Ban List Matters for Traders
Stocks approaching or entering the F&O ban list typically see higher intraday volatility, lower liquidity and abrupt price movements due to forced unwinding of leveraged positions. For traders, this often increases risk significantly, especially for those carrying overnight derivative positions.
FAQs Markets Slip Again as Bulls Lose Momentum
Why do stocks fall sharply when they enter the F&O ban list?
Stocks entering the F&O ban list often witness sharp volatility because traders are restricted from taking fresh derivative positions. This forces leveraged participants to unwind trades, reduces liquidity, and can trigger panic selling — especially in highly speculative counters.
Is it risky to buy fundamentally strong stocks during a broader market correction?
Yes, even strong companies can fall during broad sell-offs because institutional investors reduce exposure across portfolios. However, quality stocks tend to recover faster once sentiment improves, making staggered buying a more sensible approach than lump-sum investing.
How does sustained FII selling impact retail investor portfolios over the short term?
Continuous foreign selling usually weakens index momentum, hurts large-cap stocks first, and increases volatility. Retail portfolios heavily tilted towards momentum stocks or overvalued themes can face deeper drawdowns during such phases.
Why do mid-cap and small-cap stocks fall more than large caps in weak markets?
Mid and small caps generally carry higher valuation premiums and lower liquidity. When sentiment turns negative, institutional investors exit these segments faster, leading to steeper corrections compared to fundamentally stable large-cap stocks.
Can rising gold prices signal deeper trouble for equity markets?
Often, yes. A sharp rally in gold typically reflects a risk-off environment where investors are moving money away from equities towards safe-haven assets. This usually coincides with global uncertainty, currency weakness, or geopolitical tension.
How should traders manage positions when India VIX starts rising sharply?
A rising VIX indicates increasing uncertainty. Traders should reduce position sizes, avoid aggressive leverage, use strict stop-losses, and avoid overnight exposure in highly volatile stocks when volatility spikes.
Why do technically oversold markets still continue to fall?
Oversold indicators only signal stretched conditions, not immediate reversals. Markets can remain oversold for extended periods when macro triggers like weak earnings, geopolitical risk, or FII outflows continue to dominate sentiment.
