Sensex crashes over 750 points; investors lose about ₹6 lakh crore— Why did the Indian stock market fall? Explained

Indian Stock Market Falls Sharply as Sensex, Nifty Extend Losses

Indian equity markets ended sharply lower on Friday, January 23, as selling pressure intensified across segments. The Sensex dropped

 770 points (0.94%) to close at 81,537.70, while the Nifty 50 fell 241 points (0.95%) to settle at 25,048.65.

The sell-off was bro

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ased, with

 midcap and smallcap stocks facing heavier pressure. The BSE Midcap index declined 1.6%, while the Smallcap index plunged 2.2%. In a single session, investors lost over ₹6 lakh crore as total market capitalisation slipped below ₹452 lakh crore.

Why did the market fall?

The decline was driven by a combination of global and domestic factors. Persistent geopolitical uncertainties kept investors cautious, especially due to the lack of clarity around developments involving the US, Europe, and NATO. This uncertainty continued to weigh

 on risk sentiment.

Adding to the pressure, the Indian rupee weakened sharply, hitting a record low near 92 per dollar during intraday trade. A weak currency has been dampening market confidence, particularly amid global volatility.

Another major factor was aggressive selling by foreign institutional investors (FIIs). Heavy FII outflows in January have limited any meaningful market recovery, with selling seen on most rallies.

Markets also remained cautious ahea

d of the Union Budget 2026. While investors are expecting growth-oriented announcements, concerns over limited fiscal space, modest capex increases, and lack of strong consumption-boosting measures kept sentiment muted.

Finally, mixed Q3 earnings failed to

 provide any positive trigger. Although there were no major negative surprises, overall profit growth remained weak, which did little to counter global and domestic concerns.

Outlook

Until clarity emerges on global developments, currency stability, FII flows, and Budget expectations, market volatility is likely to persist in the near term.

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