Sensex and Nifty slide over 4% in January as FPI selling, rupee weakness and global risks weigh on markets
India’s benchmark indices Sensex and Nifty fell over 4% in January 2026 amid sustained foreign portfolio investor (FPI) outflows, a weaker rupee, muted earnings and global risk-off sentiment. Analysts said geopolitical tensions, tariff concerns, crude prices and bond yields have kept investors cautious ahead of the Union Budget.
- Reporting desk
- Health India Network News Desk
- First published
A rough January for Indian equities
India’s headline equity benchmarks extended their January slide, with the Sensex and Nifty down more than 4% for the month, according to market data cited in the report. The weakness was attributed to persistent foreign portfolio investor (FPI) selling, rupee pressure and a broader risk-off environment driven by global uncertainties.
The report noted that market sentiment has been dented by a combination of factors rather than a single shock. Investors have had to weigh softer corporate earnings from select heavyweights against higher global yields and renewed worries about trade restrictions and tariffs.
Why the market mood turned defensive
Among the key drags highlighted were foreign fund outflows, an unstable global macro backdrop and heightened geopolitical tension. Elevated crude oil prices and rising bond yields were also cited as reinforcing caution, reducing the appetite for risk assets and keeping trading choppy.
Earnings commentary in the report suggested that disappointments in parts of the market—spanning sectors such as IT, banking and consumption-linked names—added to the negative tone. With benchmark indices heavily influenced by a small number of large companies, any earnings setback can amplify headline index moves.
Budget expectations and the hunt for a reversal
The report also pointed to a familiar seasonal pattern: January can be weak for equities, and some participants look for a rebound after Republic Day as the Union Budget approaches. Analysts said expectations for Budget 2026–27 include balancing growth support with fiscal discipline and macro stability, especially in a volatile global setting.
For investors, the next key tests are whether FPI selling moderates, whether the rupee stabilises and whether earnings upgrades return—factors likely to determine if the market finds a floor after a challenging start to 2026.