Bears maintain grip as Sensex settles 500 pts lower from day’s high, Nifty ends near 25,150; 7 key factors behind market fall

Stock market today News: Sensex, Nifty see profit booking in trade.

• Sensex and Nifty drop sharply due to weak global cues and FII selling.
• Rupee hit a record low of 91.28 against the US dollar, adding to market pressure
• Banking and broader market indices declined, with negative market breadth

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The benchmark equity indices Sensex and Nifty extended their losses for the third straight session on Wednesday amid weak global cues and rising geopolitical concerns.

Recovering most of its sharp intra-day losses, the Sensex settled 270.84 points or 0.33 percent lower at 81,909.63. The benchmark tanked 1,056.02 points, or 1.28 percent, to 81,124.45 during the day.

The Nifty declined 75 points or 0.3 percent to 25,157.50.

The Nifty and Sensex lost about 1.4 percent and 1.3 percent, respectively, on Tuesday - their steepest single-day percentage drop in more than eight months, and logged their lowest closing levels in more than three months.

Trent, Eicher Motors and ICICI Bank were among the key laggards in the Nifty50 pack, declining up to 3 percent, while Tata Motors Passenger Vehicles and Power Grid Corporation of India rose up to 1 percent. Market breadth was negative as about 1180 shares advanced, 2325 shares declined and 141 shares unchanged.

Key factors behind market decline

1) Rupee at record low: The rupee crashed 76 paise to close at an all-time low of 91.73 against the US Dollar on Wednesday, pressured by persistent foreign fund outflow amid heightened uncertainty and risk-off sentiment in global markets.

The rupee recorded its previous all-time low of 91.14 on December 16, 2025, and so far this month, the local unit has fallen by 1.5 percent, forex traders said, adding that the depreciation can be attributed to heightened geopolitical uncertainty. Rising tensions in Europe over the Greenland issue and potential tariffs, along with a negative trend in the domestic market, further dented investor sentiment, they said.

2) Persistent FII selling: Foreign institutional investors (FIIs) remained net sellers, offloading equities worth Rs 2,938.33 crore on Tuesday. This marked the 11th consecutive session of FII selling so far in January. FIIs were net buyers on only one occasion this month — January 2 — when they purchased shares worth Rs 289.80 crore.

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3) Weak global cues: In Asian markets, South Korea’s Kospi, Japan’s Nikkei 225 and Hong Kong’s Hang Seng were trading lower. Overnight, US markets ended sharply down. The Nasdaq Composite plunged 2.39 percent, the S&P 500 fell 2.06 percent and the Dow Jones Industrial Average declined 1.76 percent.

"US equity markets closed sharply lower overnight, with the S&P 500 slipping 2 percent and the Nasdaq plunging close to 2.5 percent, marking the worst single-day fall since October. The global sell-off was triggered by renewed trade-war concerns after US President Trump escalated tariff threats on select European nations opposing US control over Greenland," Ponmudi R, CEO of Enrich Money, said.

4) India Vix rises: The India VIX — the volatility index that measures expected market fluctuations — rose about 4 percent to 13.22. A rise in the VIX typically signals higher uncertainty and risk aversion among investors, often leading to reduced exposure to equities.

5) Geopolitical concerns: Geopolitical tensions also continued to weigh on equities. Markets remained on edge amid concerns over global trade disruptions following US President Donald Trump’s statements on acquiring Greenland and reviving tariff actions against the European Union.

"There is risk-off sentiment in global markets now in response to Trump’s Greenland policy, the threatened tariffs on eight European countries and Europe’s hardening anti-Trump stance," said V K Vijayakumar, Chief Investment Strategist at Geojit Investments. He added that global equities have weakened and investors have moved towards safe-haven assets amid uncertainty over how the situation may evolve.

6) Sharp selling in Bank shares: Heavy selling pressure was seen in banking shares, mirroring across-the-board sell-off. Bank Nifty was down up to 1.5 percent with heavyweights ICICI Bank, Punjab National Bank, HDFC Bank and State Bank of India, trading with sharp cuts of up to 2 percent.

7) Broader markets fall: The broader markets extended decline amid a sharp sell-off. Both the Nifty midcap100 and smallcap100 indices declined up to 1.5 percebt.

Technical Analysis

Ajit Mishra – SVP, Research at Religare Broking, said "The Nifty has closed near its long-term moving average, the 200 DEMA around the 25,150 level, after briefly breaching it intraday. While weakness in the currency and a cautious global backdrop may continue to weigh on sentiment, oversold conditions in select heavyweight stocks could offer some short-term relief. On the downside, the 24,750–24,900 zone is seen as the next key support, while any rebound is likely to face resistance in the 25,300–25,450 range. In the current environment, a cautious stance is advisable, with preference for hedged positions and balanced exposure on both sides."

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