Indian Stock Market Tumbles on January 20 Amid Global Headwinds
Indian equity markets faced a sharp sell-off on Tuesday, January 20, extending losses for the second consecutive day. Key benchmarks plunged as global trade tensions resurfaced and corporate earnings disappointed investors.
Major Indices Record Significant Declines
The Nifty 50 index dropped 1.4% to close at 25,225, marking its lowest level in four months. The S&P BSE Sensex fell 1.43% to settle at 82,054. Broader markets suffered even steeper declines, with the Nifty Midcap 100 plunging 2.62% and the Nifty Smallcap 100 tumbling 2.85%.
All major sectoral indices closed in negative territory. Nifty Realty faced the heaviest blow, falling 5%. Nifty Consumer Durables and Nifty Chemicals each declined 2.7%. Other sectors including auto, IT, pharma, media, oil & gas, and FMCG fell between 1.5% and 2.5%.
Multiple Factors Drive Market Weakness
Several factors contributed to the market downturn. Global trade tensions heated up after US President Donald Trump threatened additional tariffs on European countries. Mixed earnings from large-cap companies disappointed investors. Foreign portfolio investors continued their selling spree, offloading another ₹3,262 crore on Monday.
Persistent foreign selling has resulted in month-to-date outflows reaching ₹27,000 crore. Geopolitical tensions and rupee weakness further dampened market sentiment. The first batch of December-quarter results from Nifty 50 companies appeared muted due to labor code-related expenses.
Individual Stocks Face Heavy Selling Pressure
According to Trendlyne data, over 100 constituents of the Nifty 500 index finished the session with losses exceeding 3%. Newgen Software Technologies led the decline, crashing 14% to ₹631 per share. This marked the stock's lowest level since November 2023.
Data Patterns followed with a 9.2% drop to ₹2,256 per share. Ola Electric shares fell 9% to ₹32.6, extending losses to ten consecutive sessions. The company announced the exit of its CFO Harish Abichandani, citing personal reasons.
Real estate stocks including Sobha, Oberoi Realty, Aditya Birla Real Estate, Lodha Developers, Godrej Properties, and Prestige Estates Properties fell over 5% each. Havells India tumbled 7.45% following December-quarter results, despite reporting healthy numbers.
Management's cautious outlook due to commodity inflation dented investor sentiment. Other cable and wire stocks like KEI Industries and Polycab India fell 5.7% and 4.6% respectively. Additional decliners included HBL Engineering, LTIMindtree, Tejas Networks, Netweb Technologies, CDSL, Vodafone Idea, YES Bank, and Reliance Infrastructure, which dropped between 5% and 7%.
Global Developments Add to Market Worries
In Europe, tensions escalated as Denmark increased its military presence in Greenland. President Trump refused to rule out using force to secure control of the island. He threatened to impose additional import tariffs on eight European countries starting February 1, potentially rising to 25% by June unless a deal is reached for Greenland.
These developments reignited global trade concerns, contributing to the broad-based sell-off in Indian markets. Investors remained cautious amid the uncertain global environment and domestic earnings season.
