The week’s selling translated into a 2.51% decline in the Nifty, which closed at 25,048, while the Sensex fell 2.4% to settle at 81,537.

Foreign portfolio investors (FPIs) intensified their selling in Indian equities during the week ended January 23, offloading a net ₹11,068.34 crore across five consecutive trading sessions, according to data from the National Securities Depository Limited (NSDL). The relentless weekly outflow marks a sharp escalation in selling pressure, with Monday recording the heaviest single-day outflow at ₹4,542.94 crore.

The selling remained unabated throughout the week. Monday witnessed net sales of ₹4,542.94 crore, followed by ₹2,062.07 crore on Tuesday, ₹1,210.45 crore on Wednesday, ₹988.70 crore on Thursday, and ₹2,264.18 crore on Friday. FPIs sold equities worth ₹95,563.59 crore during the week while purchasing only ₹84,495.25 crore, reflecting sustained risk-off sentiment.

“FPIs not only continued their selling spree in the week ended 23rd January, but also increased the intensity of their selling. Total FPI selling in the equity market this month through 23rd January stood at ₹33,598 crores. This is the highest monthly selling figure since August 2025,” said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.

Falling rupee

The rupee’s relentless depreciation emerged as a key trigger for the exodus. The domestic currency touched ₹91.96 against the dollar on Friday, prompting FPIs to de-risk their India positions. “A major factor that pushed FII selling has been the continuous decline in the rupee which touched ₹91.96 to the dollar on Friday. Market participants believe that the delay in the US-India trade agreement will widen India’s trade and current account deficits further impacting the rupee. Sustained FII selling is in anticipation of this rupee depreciation,” Vijayakumar explained.

The week’s selling translated into a 2.51 per cent decline in the Nifty, which closed at 25,048, while the Sensex fell 2.4 per cent to settle at 81,537. The correction wiped out ₹16 lakh crore in market capitalisation, with realty, consumer durables and capital market stocks bearing the brunt of the downturn, falling 11.33 per cent, 6.55 per cent and 6.50 per cent respectively.

“From its recent record high, the Nifty has undergone a swift correction of over 5 per cent within just 11 trading sessions, making it one of the sharpest declines in recent months,” noted Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities. “A key technical development is Nifty’s breakdown below its 200-day EMA for the first time since April 2025, accompanied by the formation of a large bearish candle on the weekly chart.”

DIIs provide support

While FPIs retreated, domestic institutional investors (DIIs) provided critical support, pumping in ₹20,746 crore during the week. “Since July 2025, persistent FII selling has been effectively countered by strong domestic inflows. While FIIs have sold nearly ₹2.24 lakh crore, DIIs have absorbed much more – around ₹4.85 lakh crore, largely cushioning the impact,” Shah added.

However, concerns about earnings quality and trade uncertainties continue to weigh on sentiment. “Sentiments remained very weak due to a combination of factors such as sustained rupee depreciation, lack of any finality regarding US-India trade deal and unimpressive Q3 results, so far, which are not indicating any pick up in corporate earnings,” Vijayakumar said.

Dr Ravi Singh, Chief Research Officer from Master Capital Services, noted the broader market impact. “The decline in domestic equities can be attributed to a combination of persistent global and domestic headwinds. On the domestic front, underwhelming and cautious Q3 earnings commentary from several corporates emerged as a key trigger, weighing heavily on market confidence.”

“In brief, if FII confidence in Indian market is to resume two conditions should be fulfilled: One, corporate earnings have to improve; two, the US-India trade deal should happen. While the former is likely in Q4 FY26, there is no clarity at all on the timeline of the latter. This is the biggest uncertainty weighing on the market now,” Vijayakumar added.

Published on January 24, 2026