Sensex, Nifty Crashed: Why Indian Stock Market Fell Sharply On Monday, January 27?

Stock Market Crash: The Indian stock market crashed on Monday, January 27, 2025, with Sensex falling below 75,400 levels and Nifty 50 slipping below the 22,900 mark. Dragged by broad-based selloffs, both benchmarks have nosedived by more than 1% each. Indian stocks continue to struggle broadly in January due to fragile sentiment owing to uncertainty around US President Donald Trump's tariff policies. FIIs continue to remove money.

Sensex Price:

At the time of writing, Sensex traded at 75,571.45, down by 619.01 points or 0.81%. In the early trade, the benchmark nosedived by as much as 842.4 points to hit an intraday low of 75,348.06. Stocks like Power Grid, Zomato, HCL Tech, Tata Motors, Tech Mahindra, IndusInd Bank, TCS, and Bharti Airtel emerged as top bears, with a decline of 2% to 4%.

BSE Sensex Next 50 nosedived by nearly 2,182 points to below 75,400 levels. Of the total 4,085 stocks traded on BSE, about 3,436 stocks declined and only 498 stocks advanced, the rest 151 stocks were unchanged.

Nifty:

The 50-scrip benchmark shed about 196.30 points or 0.85% to trade at 22,895.90 currently. In the early trade, the benchmark had nosedived by 265.35 points to hit an intraday low of 22,826.85. India's volatility index surged by over 7% to cross the 18 mark.

Nifty Midcap 100 and Nifty Smallcap 100 were down by 2-4%. All sectoral indices were in red. Nifty Healthcare, Nifty Consumer Durables, Nifty Pharma, Nifty IT, Nifty Metal, and Nifty Oil & Gas stocks plunged by 2% to 2.5%. Nifty Media plummeted by nearly 4%. Also, Nifty Auto was down 1%.

What Is Impacting the Stock Market?

Prashanth Tapse, Senior VP (Research), Mehta Equities explained that Nifty continues to face bearish pressure as market sentiment remains fragile due to uncertainty around former President Donald Trump's tariff plans and a record FII outflow of Rs. 69,080 crores this January. With a bearish technical setup and lower highs/lows on daily charts, Nifty is at risk of closing below the key 23,000 level, with next support at 21,281.

Tapse added that key near-term catalysts include the upcoming FOMC meeting on January 28-29 and the Union Budget on February 1st. Corporate Q3 earnings from COAL INDIA, IOC, TATA STEEL, BAJAJ HOUSING FINANCE, CANARA BANK, ADANI TOTAL GAS, and others are expected today.

According to Dr V K Vijayakumar, Chief Investment Strategist, at Geojit Financial Services, the market sentiment has turned weak. Sustained FPI selling (Rs 69000 crores in January, so far) is impacting the market. Despite DII buying of Rs 67000 crores in January, so far, the market is under pressure. A major concern is that President Trump is coming up with new threats like the 25 % tariff on Columbia for its refusal to take back deported illegal immigrants. The threatened 25% tariff on Canada and Mexico might be implemented from February 1st onwards. Therefore, will Trump walk his talk on other threats including tariffs on China and other countries, is a question that is being asked in economic and market circles now. These concerns are weighing on the markets.

Further, Vijayakumar said, this 6-day week is likely to be highly volatile with other major events like the Fed decision and the Budget in India. The market is looking forward to fiscal stimulus through income tax cuts in the Budget. If the expectations are met, there can be a relief rally in the market. But if a rally is to sustain, we need data indicating growth and earnings revival.

The latest performance comes after the benchmarks declined for three consecutive week in January, which is the long losing streak since October last year.

Technically speaking, Akshay Chinchalkar, Head of Research, Axis Securities said, Nifty's breaking above 23475 is needed in the near-term for a bullish flip, but till that happens 22976 will remain vulnerable with the longer-term focus in the 22500 - 22800 area.