Mcap of all listed firms on NSE falls below $5 trillion first time in eight months

markets

• NSE market cap falls below $5 trillion, lowest since May 2025
• Sensex and Nifty drop over 4% in ten sessions, hit three-month lows
• Global tensions and FII selling drive sharp correction in Indian equities

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The total market capitalisation of all listed companies on the National Stock Exchange (NSE) has fallen below the $5 trillion mark for the first time in eight months, reflecting the continued correction in Indian equity markets since the start of 2026.

According to NSE data, the combined mcap declined to $4.98 trillion, a level last seen on May 9, 2025. The current valuation is down nearly $300 billion from about $5.3 trillion at the beginning of the year.

On January 20, benchmark indices Sensex and Nifty fell 1.3 percent each, sliding to nearly three-month lows. Sensex dropped over 1066 points while Nifty declined 353 points. All major sectoral indices ended in the red, with the realty index recording the steepest decline, shedding more than 5 percent.

With this fall, both Sensex and Nifty have corrected over 4 percent each in just ten trading sessions, marking one of the fastest short-term declines in recent months. The indices are currently hovering near its 200-day exponential moving average, a key long-term support level closely watched by traders and institutional investors. The daily relative strength index has dropped to 29.27 — its weakest reading since March 2025 — indicating oversold conditions while also reflecting strong downward momentum, experts said.

The pressure was even more pronounced in the broader markets. The Nifty Midcap 100 index plunged 2.62 percent, while the Nifty Smallcap 100 fell 2.85 percent, extending their underperformance. Notably, the Midcap index closed below its 200-day EMA for the first time since August 2025, signalling a potential shift in the medium-term trend. The Smallcap index recorded its lowest closing level since May 2025 and is now trading nearly 6 percent below its 200-day EMA, highlighting significant stress in high-beta segments of the market.

The recent weakness in domestic markets has been largely driven by a broader correction in global equities. Investor sentiment has also remained cautious ahead of the Union Budget scheduled to be presented on February 1.

The selloff in global markets intensified as tensions between the United States and Europe over control of Greenland showed no signs of de-escalation. Heavy selling in Japanese government bonds further rippled through global debt markets, adding to volatility across asset classes.

US President Donald Trump’s aggressive push to take control of Greenland has renewed uncertainty in financial markets, reviving concerns of a potential trade confrontation between long-standing allies, with little indication that either side is prepared to ease its stance.

The global selloff accelerated after a sharp decline in Japanese long-term bonds, with yields rising as investors reacted negatively to Prime Minister Sanae Takaichi’s election proposal to cut taxes on food. The yield on 30-year Treasuries jumped nine basis points to 4.92 percent, as bond markets worldwide came under pressure.

Indian equities were already facing headwinds amid sustained foreign investor selling, stretched valuations and subdued earnings growth. FIIs have sold nearly $2.5 billion worth of Indian equities so far in 2026, following net outflows of more than $18 billion in 2025. Meanwhile, earnings reported so far for the December quarter have remained under pressure. Early results from India Inc have been muted, with labour code–related changes weighing on performance and several companies missing analysts’ earnings estimates.

Experts said that while intraday market structure remains weak, conditions appear oversold, and a short-term pullback from lower levels cannot be ruled out. For traders, sentiment is expected to remain weak as long as the market stays below 25,300 on the Nifty and 82,300 on the Sensex. On the downside, the market could slip towards the 25,100–25,000 zone on the Nifty and 82,000–81,700 on the Sensex. On the upside, a move above 25,300 and 82,300 could trigger a pullback rally towards 25,400–25,435 and 82,500–82,800 respectively.