The broader stock market selloff on Monday wiped Rs 9 lakh crore off BSE market capitalisation (m-cap), eroding investor wealth by Rs 32 lakh crore in January so far. The selloff was led by small and midcap stocks, with benchmark SMID indices falling up to 4 per cent today and 11-14 per cent this month so far.
The fall has come as foreign outflows hit Rs 64,156 crore in January on a rising dollar under the Trump 2.0 and high valuations in India. Investors are keeping low expectations from the forthcoming Union Budget 2025 and see no Fed rate cuts ahead. Weak earnings by corporates are not helping either.
“Broad-based selling across sectors plummeted the Indian market amidst tepid earnings and weak sentiments across the globe. Mid and small caps remained in their downward trajectory over expensive valuations. FIIs are on a selling spree due to moderation in economic growth and rupee depreciation. The weak sentiments were further exacerbated as the US trade confrontation continued, like with Colombia this time,” said Vinod Nair, Head of Research, Geojit Financial Services.
The BSE market capitalisation fell 9.29 lakh crore to Rs 410.22 lakh crore on Monday from Rs 419.51 lakh crore on Friday. Investor wealth is down Rs 31.72 lakh crore over Rs 441.95 lakh crore it enjoyed on December 31, 2024. A total of 494 stocks hit their 52-week lows today.
A total of 165 of BSE500 stocks are in a correction mode falling over 10 per cent in 2025 so far. Among them 30 stocks have fallen 20-40 per cent, data showed.
“This trend highlights the dominance of bears, who are reacting sharply to any earnings disappointments. In addition to selling pressure from FIIs, global market caution is adding to the downside momentum. We are now eyeing 22,700 as the next crucial Nifty support and its break would further deteriorate the situation. Focus more on the risk management, particularly in midcap and smallcap segments and avoid adding to the loss-making trading positions,” said Ajit Mishra – SVP, Research, Religare Broking.
Stocks such as Kalyan Jewellers India Ltd, Newgen Software Technologies, Ltd, KEC International Ltd, Techno Electric & Engineering Company Ltd, Sobha Ltd, Motilal Oswal Financial Services Ltd, Network 18 Media & Investments Ltd and Cyient Ltd have lost 20-44 per cent in 2025 so far.
Godrej Industries Ltd, Sterling and Wilson Renewable Energy Ltd, Prestige Estates Projects Ltd, CESC Ltd, Aditya Birla Real Estate Ltd. Kaynes Technology India Ltd, KFin Technologies Ltd and Oberoi Realty Ltd are some other BSE500 stocks taking a hit in 2025.
Among largecap indices, the BSE Sensex fell 1 per cent today and 4 per cent in 2025 so far. Nifty declined 1.14 per cent today and 3.85 per cent month-to-date.
Emkay Global said it expects a relatively quiet Budget, with a focus on continuity rather than dramatic change. A countercyclical stimulus is unlikely, it said adding that the heavy lifting would have to be done by relaxed lending guidelines and monetary easing further down the line.
“If the Budget takes a negative turn, there is potential for the markets to experience a downturn,” Rakeshh Mehta of Mehta Equities.
Nair said heightened volatility is here to stay this week, ahead the upcoming events risk like the FOMC meeting, F&O expiry, and Union Budget 2025.
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