Indian stock markets witnessed sharp volatility on January 22 as the Sensex plunged nearly 750 points from the day’s high and the Nifty 50 today slipped close to the 25,200 mark. After opening on a positive note following supportive global cues, domestic benchmarks quickly reversed gains due to heavy selling pressure. Profit booking, continuous foreign fund outflows, rupee weakness, and rising market volatility were the main triggers behind this sudden correction.
Let’s take a closer look at the four major reasons responsible for the sharp fall in the Nifty 50 and Sensex.
Profit Booking After Recent Rally
Markets started the day strongly after global equities rebounded. Positive sentiment was driven by reports that US President Donald Trump stepped back from his earlier threats of imposing tariffs on several European countries. This eased global trade tensions and improved investor confidence.
- Nifty 50 today jumped 1.09% to 25,430
- Sensex gained 1.03% to 82,751
However, this rally was short-lived. Investors used the rise as an opportunity to book profits after three consecutive sessions of decline. The broader market also faced selling pressure, with Nifty Midcap falling 1.26% from its intraday high.
According to Aakash Shah, Technical Research Analyst at Choice Broking:
“The 25,250–25,300 zone acts as immediate resistance for Nifty 50. Any recovery towards this band may face selling pressure. On the downside, 25,000 remains a crucial psychological support. A decisive break below this level could drag the index towards 24,800–24,900.”
He also added that momentum indicators remain weak, though oversold conditions may trigger short-lived relief rallies.
Continued FII Selling Weighs on Markets
Foreign Institutional Investors (FIIs) continued to remain net sellers, adding pressure on Indian equities. Market experts believe that FII outflows will persist until strong positive triggers emerge.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, highlighted:
“In 2025, despite massive investments of ₹7.44 lakh crore by Domestic Institutional Investors (DIIs), the Nifty 50 delivered a modest return of only 10%. This was mainly due to weak earnings growth and elevated valuations. FIIs sold shares worth ₹1.66 lakh crore during the year.”
He further stated that uncertainty surrounding the US-India trade agreement is also impacting investor sentiment. With global funds focusing more on the booming AI sector, foreign investors are diverting capital to international markets, thereby limiting flows into Indian equities.
Weak and Rangebound Rupee Adds Pressure
The Indian rupee continues to remain under pressure against the US dollar. On January 22:
- Rupee opened at 91.53
- Traded near 91.59
- Recently touched an all-time low of 91.7425
Despite intermittent intervention by the Reserve Bank of India (RBI), the currency has failed to sustain any meaningful recovery. A weak rupee raises concerns about rising import costs, inflationary pressures, and foreign capital outflows. This negatively impacts investor confidence and contributes to selling pressure in the Nifty 50 and broader market.
Currency volatility also affects sectors like IT, oil & gas, and metals, which are sensitive to exchange rate movements.
India VIX Signals Rising Market Volatility
The India VIX, which measures expected market volatility, jumped nearly 4% after initially declining earlier in the session. Rising VIX indicates growing uncertainty and fear among investors.
- High VIX = Higher market risk
- Low VIX = Stable market conditions
According to SAMCO Securities, the sharp rise in volatility reflects fragile market sentiment and large intraday swings. The weak advance-decline ratio also indicates broader market weakness, suggesting that more stocks declined than advanced.
Sectoral & Stock Performance
Sector-wise, the Nifty Realty index emerged as the worst performer of the day. Banking stocks also failed to support the market recovery.
Key stock movements:
- SBI Life Insurance fell nearly 2%
- Hindalco Industries traded lower
- Max Healthcare slipped
- Shares of Eternal declined after early gains
Heavyweights like HDFC Bank and ICICI Bank fell marginally, which capped overall market upside. Since banking stocks carry high weightage in the Nifty 50, even small declines significantly impact the index.
Technical Outlook for Nifty 50 today
From a technical perspective:
| Level | Importance |
| 25,300 | Strong Resistance |
| 25,000 | Key Psychological Support |
| 24,800 | Next Support |
If the Nifty 50 today breaks below 25,000 decisively, analysts warn of further downside towards 24,800–24,900 in the near term.
Bank Nifty Outlook
- Resistance: 59,700 – 60,000
- Support: 58,500 – 58,600
Bank Nifty has failed to reclaim higher levels, indicating cautious sentiment in banking stocks due to uncertain earnings outlook.
Conclusion
The sharp fall in Sensex and Nifty 50 today was triggered by a combination of factors:
Heavy profit booking
Persistent FII selling
Weak rupee
Rising market volatility
Until earnings visibility improves and foreign fund flows stabilize, markets are likely to remain volatile and rangebound. Investors are advised to stay cautious, focus on fundamentally strong stocks, and avoid panic-driven decisions.
