Stock markets on a bear run; Sensex falls 750 points

On January 27, the Sensex and Nifty experienced significant declines, driven by weak global market trends, disappointing corporate earnings, ongoing foreign capital outflows, and uncertainties surrounding U.S. trade policies. The Indian stock market was particularly impacted by downturns in the banking and IT sectors, although the FMCG sector saw slight gains.

By 10:45 am, the Sensex had dropped 750 points, or 0.98%, to 75,447, while the Nifty fell 227 points, or 0.98%, to 22,865. Out of the total traded shares, 550 advanced, 2,695 declined, and 155 remained unchanged. The broader market faced even steeper losses, with the BSE Midcap index falling 3% and the Smallcap index plunging over 4%.

Global markets also felt the pressure as investors reacted to the launch of DeepSeek, a Chinese startup’s free, open-source AI model, which is seen as a potential competitor to OpenAI’s ChatGPT. Additionally, the U.S. dollar gained strength after President Donald Trump imposed sanctions and tariffs on Colombia for refusing entry to military aircraft carrying deported migrants.

U.S. stock futures and most Asian markets declined, with Nasdaq Composite futures dropping nearly 2% and S&P 500 futures falling 1%. Japan’s Nikkei lost 0.3%, reversing earlier gains, while New Zealand’s benchmark index fell 0.6%. However, Hong Kong’s Hang Seng rose 0.9%, and mainland China’s CSI 300 edged up 0.2%, despite data showing an unexpected contraction in manufacturing activity.

In India, the benchmark indices recorded their third consecutive weekly loss. Foreign portfolio investors (FPIs) have been net sellers, withdrawing a massive Rs 69,080 crore from Indian equities in January alone.

The ongoing earnings season has played a significant role in shaping market sentiment. “Corporate results have been mixed, with a slight tilt toward negative surprises, as many companies have fallen short of expectations. The unpredictability of U.S.-India relations under Trump’s administration is further fueling investor concerns. While some policy announcements have been made, Trump’s unpredictable approach could lead to increased market volatility,” noted Baliga.

With only five trading sessions remaining before the Union Budget on February 1, market participants are also closely watching the U.S. Federal Reserve’s rate decision on January 29. Although the Fed is expected to maintain current rates, investors are eager for insights into future monetary policy, especially given President Trump’s calls for lower borrowing costs.

Among individual stocks, ICICI Bank stood out, rising 0.6% after reporting higher quarterly profits, driven by strong loan growth despite some pressure on lending margins.