Indian Stock Market on a Falling Spree: Nifty 50 Dragged Below 25, 500 Amid FII Selling

Indian equity markets opened the week on a weak note, with the benchmarks coming under significant selling pressure. The Nifty 50 slipped over 200 points to fall below the 25,500 level, while the Sensex also declined, with the 30-share index slipping below the 83,000 mark.

Over the past six straight sessions, Indian equity benchmarks have witnessed a sharp sell-off, with the Sensex plunging more than 2,700 points, over 3% while the Nifty 50 has also declined by more than 3%.

This sustained downturn has significantly dented investor wealth, with over ₹16 lakh crore wiped out during this period. The total market capitalisation of BSE-listed companies has fallen to around ₹465 lakh crore, down from over ₹481 lakh crore on January 2.

The Nifty Bank index mirrored the broader weakness, shedding nearly 200 points. The 59,000 level remains a crucial support on the downside, particularly amid continued underperformance in HDFC Bank.

Meanwhile, the earnings season for Nifty 50 constituents kicks off today, with IT majors TCS and HCLTech scheduled to announce their results after market hours. 

Selling by FIIs

Foreign institutional investors (FIIs) have remained persistent sellers since July last year, driven by concerns over stretched valuations relative to growth, the continued weakness in the rupee, and the impact of US-imposed tariffs on Indian exports.

In the cash market alone, FIIs have sold Indian equities worth nearly ₹12,000 crore so far in January (up to the 9th). Between July and December last year, cumulative FII outflows stood at approximately ₹1.85 lakh crore, underscoring the sustained pressure on domestic equities.

Bond Market Update

Indian government bonds edged higher on Monday, supported by lower-than-anticipated supply in the upcoming state government debt auction. The reduced issuance helped allay concerns over a supply overhang following the states’ record borrowing plans for the quarter.

The benchmark 10-year 6.48% 2035 bond yield eased to 6.6263% as of 10:07 a.m. IST, compared with 6.6401% at Friday’s close. States are expected to raise ₹268.15 billion at Tuesday’s auction, significantly lower than the previously indicated ₹362 billion, offering near-term relief to the bond market.

Also Read: Check Gold and Silver Prices on Jan 12, 2025, Across Delhi, Mumbai, and Bangalore Here!

In the derivatives space, the one-year OIS remained unchanged at 5.49%, while the two-year OIS declined by around 2 basis points to 5.57%. The actively traded five-year OIS rate also softened, slipping 1.25 basis points to 5.94%.

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