BSE Sensex Witnesses Worst January Since 2017: Understanding the Drastic Fall

The BSE Sensex, India’s benchmark stock index, experienced a steep fall of 800 points on January 27, 2025, marking a decline of over 1%. This performance contributed to its worst January since 2017, with the index losing 3.5% so far this month. A significant rise in India VIX, up by 9% to 18.30, highlights growing market volatility.

Adding to the dismay, the market capitalisation of BSE-listed firms plummeted by ₹10 lakh crore in a single session, dropping below ₹410 lakh crore from ₹419.5 lakh crore in the previous session as of January 27, 2025. 

Key Drivers Behind the Downfall

1. Weak Corporate Earnings
   Disappointing Q3 earnings from Indian corporates have dampened investor sentiment. Many sectors have reported slower-than-expected recoveries, further straining an already cautious market due to high valuations.
2. Global Uncertainty
   Persistent foreign outflows and concerns around U.S. trade policy have compounded market pressures.
3. Budget 2025 Speculations
   As the Union Budget 2025 approaches, markets are grappling with uncertainty. Investors are keenly observing whether the government will balance fiscal prudence with measures to boost consumption. Concerns over a potential shift toward populist measures or relaxed fiscal discipline could add further volatility.

Sectoral Performance: The Advance-Decline Ratio

The market breadth remained negative, with 24 stocks declining compared to just six advancing.

• Top Decliners: Tech Mahindra, HCL Tech, and Zomato witnessed sharp losses.
• Top Gainers: ICICI Bank, M&M, and SBI managed to buck the trend and trade in the green.

Historical Context: Worst January Since 2017

The 3.5% correction in January 2025 marks the worst monthly performance for the Sensex since 2017. The last significant January decline occurred in 2021 when the index fell by 3.07%.

Conclusion: A Month of Challenges

January 2025 has been a challenging month for Indian equities, with weak earnings, global headwinds, and investor uncertainty driving the Sensex to its worst start in 8 years. As Budget 2025 looms, all eyes remain on how policymakers. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.