Weekly Musings – Heavy selling marks the week to January 23, 2026

19 Jan 2026 , 03:04 PM

MARKETS END LOWER IN A VOLATILE WEEK

For the week to January 23, 2026, there were very few pockets of positive performance. While the frontline indices were down around 2.5%, the smaller indices corrected more sharply. The VIX (a barometer of fear factor in the market) spiked from a low of 8.6 levels four weeks back to a high of 14.43. That is indicative of a sharp spike in caution in the market. Also, the FPIs were net sellers in equities to the tune of $1.22 Billion in the recent week and have net sold Indian equities worth $4.60 Billion in the last 4 weeks.

Geopolitics is a rather strange game. Trump threatens to take over Greenland by force, Europe reacts strongly, and India feels the pressure of sell-off. That is the way geopolitical risks play; they hit emerging markets the most. In times of geopolitical crisis, investors retreat to safer asset classes, and any risk-off trading is against the interests of countries like India. The best evidence of event risk was captured by the rally in gold and silver. Gold at $4,980/oz is closing in on its 2026-end price target of $5,000/oz in January itself. Also, silver has now rallied 220% in 1 year, and is showing signs of relentless safe-haven demand.

HOW BROAD INDICES PERFORMED IN THE WEEK TO 23-JAN

To get a macro picture of the markets, we look at four generic indices that represent most facets of the Indian equity markets. That is captured in the table below.

Index	LTP	1-Week Ago	Weekly High	Weekly Low	Weekly Returns
BSE Sensex	81,537.70	83,570.35	84,134.97	81,124.45	-2.43%
Nifty 50	25,048.65	25,694.35	25,653.30	25,025.30	-2.51%
Mid-Cap 100	57,145.65	59,867.80	59,938.70	56,681.10	-4.55%
Small Cap 100	16,352.75	17,362.30	17,366.90	16,326.35	-5.81%
Data Source: NSE / BSE

The broad indices across large caps, mid-caps and small caps corrected sharply during the week. This can be attributed to the rising levels of event risk in global markets with Trump making noises about taking over Greenland by force. Also, there have been persistent delays in the Indo-US trade deal and that is making markets jittery. High US tariffs are starting to hit Indian exports and the immediate impact is also seen in the weakness in the rupee.

Incidentally, the weakness in the rupee is one of the reasons for small and mid-cap stocks correcting more sharply than the large caps. Smaller stocks tend to be more vulnerable to rupee weakness, as they do not have natural hedges like the larger names. Also, investors do not see the current time as ripe for alpha hunting, amidst rising global uncertainty. That led to a sharp sell-off in the mid-cap and small cap indices this week.

HOW SECTORAL INDICES PERFORMED IN THE WEEK TO 23-JAN

Here, we look at four sectoral indices that represent bulk of the Nifty basket weight.

Index	LTP	1-Week Ago	Weekly High	Weekly Low	Weekly Returns
Auto Index	26,804.55	27,596.25	27,751.15	26,602.95	-2.87%
Bank Nifty	58,473.10	60,095.15	60,107.50	58,278.60	-2.70%
NBFC Index	30,491.95	31,813.35	31,964.95	30,446.30	-4.15%
FMCG Index	51,662.05	52,142.50	52,669.95	51,217.20	-0.92%
Healthcare	13,957.30	14,388.75	14,354.15	13,831.60	-3.00%
IT Index	38,238.50	39,086.65	38,977.65	37,451.35	-2.17%
Metals Index	11,477.80	11,600.05	11,692.55	11,246.95	-1.05%
Oil & Gas	11,306.65	11,748.50	11,735.20	11,220.75	-3.76%
Data Source: NSE / BSE

Here are key takeaways for investors from the sectoral returns in the week.

• Auto basket has seen varied performance. Bajaj Auto and Ashok Leyland held strong in the week, while the correction was most intense in the auto component stocks like TI India, Motherson Sumi, Exide, and Bosch Ltd.
• Banking moved in tandem with the overall indices. However, heavyweight private banks like HDFC Bank and ICICI Bank came under pressure. PSU banks like SBI, Canara Bank, and Indian Bank held up relatively well during the week.
• On the NBFC stocks, the pressure was a lot sharper. Barring a handful of PSU-NBFCs like REC and PFC, most of the other NBFC and insurance plays came under pressure amid rising event risk globally. Rising NPA incidence has also been a concern.
• While FMCG stocks still face the urban demand question, the GST impact is already factored in. Hence the sector lost less in the week. Most of the pressure came from ITC and United Spirits, mainly on the back of penal tax concerns.
• Healthcare fell sharply in the week. Generics exporting to the US have been under stress due to the Drug Price Reforms, which could squeeze margins further. Hospital stocks have also faced pressure due to lower utilization and health insurance issues.
• The IT index fell despite the weakness in the rupee (which is normally positive for IT stocks). However, the correction was more on mid-cap IT stocks like Coforge, Persistent, and LTIM; even as Infy, HCL Tech, and TECHM have held up amidst strong guidance.
• The metals segment has seen a strong run in stocks like HZL, Vedanta, and NALCO on the back of robust copper, aluminium, and silver prices. For the week, the pressure came largely from Adani Enterprises, more due to US regulatory concerns.
• Oil & Gas fell 3.8% in the week. Downstream companies took a hit in the week due to the 10% spike in Brent Crude prices globally, which could constrain margins. ATGL also contributed to the pressure, more due to group level issues on US regulation.

A week is a short time to take a sectoral call, but the broad message is that this correction is more due to global event risks. That is something India does not have too much control over. Investors must focus more on domestic oriented businesses, which have a natural hedge against the ups and downs of globally oriented businesses.

 

Summary The week to 23-January 2026 saw intense pressure build up across most sectors. The reason for the correction was the rising geopolitical risk globally and FPIs selling Indian equities worth $4.60 Billion in the last 4 weeks. That has impacted sentiments. For investors, it may not be the right time to jump in and start bottom fishing after a small correction. A better approach would be to focus on Indian market-oriented stocks; and pick them up in a phased manner so as to get a much better entry price overall!