Sensex settles 271 pts lower, Nifty below 25,200; will stock market selloff continue?

Domestic equity benchmarks ended Wednesday’s trade on a weaker note, marking their third straight session of losses, dragged by lingering geopolitical tensions, pressure from a sharply depreciating rupee, mixed corporate earnings, and continued selling by foreign investors.

At close, the Sensex declined 270.84 points, or 0.33 per cent, to settle at 81,909.63. The Nifty slipped 75 points, or 0.30 per cent, to close at 25,157.50. 

The Sensex has closed lower in 11 of the 14 trading sessions in January 2026, while the Nifty has finished in the red in 10 sessions during the same period.

Nifty opened with an exhaustion-led gap-down near 25,150 and saw sharp selling pressure in early trade, slipping toward the psychological 25,000 mark, saidPonmudi R, CEO of Enrich Money. He noted that the index briefly breached its 200-day EMA to hit an intraday low near 24,920 before finding some stability.

He added that the recovery attempt toward 25,300 failed to sustain as the bounce did not attract follow-through buying, leading to fresh supply and dragging the index back to the 25,100 zone. According to him, the day’s price action resulted in a spinning-top type candle near a key support level, reflecting indecision after a sharp decline rather than a clear reversal.

ICICI Bank emerged as top loser on the Sensex, slipping 2.01% to Rs 1347.70. Trent followed with a 1.96% fall, while Bharat Electronics (BEL), Axis Bank, L&T, and HDFC Bank declined 1.41%, 1.22%, 1.13% and 1.07%, respectively. 

Five stocks, namely ICICI Bank, HDFC Bank, Larsen & Toubro (L&T), State Bank of India (SBI) and Axis Bank, contributed heavily to the Sensex’s slide.      

Vinod Nair, Head of Research at Geojit Investments Limited, said sentiment was dampened by global risk factors, and domestic markets were engulfed in volatility. Value purchases near the end, however, assisted the market in recovering some of its initial losses. 

Among sectoral indices, the BSE Consumer Durables index dropped 1.24% to close at 57,348.30, while the BSE Bankex declined 0.94% to settle at 66,270.17

In the BSE 100 index, shares of ITC and Trent hit a fresh 52-week low of Rs 324.35 and Rs 3,694.45, respectively.

Overall, of the 4,405 actively traded BSE stocks, 1,459 closed higher, 2,810 declined, and 136 remained unchanged. During the session, 59 stocks touched their 52-week highs, while 916 fell to 52-week lows. Meanwhile, 121 scrips hit their upper circuits, and 285 were locked in lower circuits.

Ponmudi said the European Union’s description of the India–EU trade pact as ‘historic’ offered a constructive medium-term signal for India’s external trade outlook. However, he cautioned that the lack of immediate clarity on implementation, coupled with fresh tariff rhetoric from US President Donald Trump, limited any near-term optimism for Indian equities.

“In this challenging environment, tepid earnings from the banking and IT sectors are adding to the overall pressure on equities. The weakening INR and uncertainties surrounding trade ties may prolong this volatility. Nevertheless, the ongoing earnings season could present selective accumulation opportunities as the next session is expected to be better-off led by the resilient domestic demand," Nair said.