₹9.5 lakh of Investors Money Wiped Out on Jan 27: What Lies Ahead for Indian Stock Market?

On January 27, 2025, Indian stock markets faced a rough start to the expiry week of the January series. The Nifty 50 index dropped by over 200 points, falling below the 23,000 level for the first time since June 7. It had already closed at a 6 -month low last Friday. Although the index is down by 200 points and is now eyeing support at 22,800, the real strain is being felt in the broader market.

The sharp decline in broader stocks has already wiped off ₹9.5 lakh crore during the trading session on January 27, 2025, where Nifty 50 ended at 22,829.15, down 1.14%. Here are the key factors contributing to the market downturn:

Global Market Weakness

Indian equities kicked off the week following a weak handover from Wall Street. While U.S. markets experienced only mild profit-taking after a four-day rally, futures were signalling a significant decline. By 3:30 PM, Nasdaq futures were down nearly 750 points, largely due to concerns surrounding a Chinese AI start-up, DeepSeek, which has cast a shadow over the entire U.S. AI rally

Trump Tariff Uncertainty

Donald Trump has threatened to impose tariffs on China, Mexico, and Canada starting February 1, and has also introduced a 25% emergency tariff on Colombia over concerns about illegal migration. Although the tariff was reversed within hours after Colombia accepted Trump’s demands, the action has sparked significant uncertainty among investors. The move raises questions about when, how, and to what extent tariffs might be applied to other countries, and whether they could later be lifted.

Weak Q3 Earnings

The Indian market saw disappointing Q3 earnings, fueling uncertainty among investors. JSW Steel reported a 70% drop in profit, while Cyient experienced a nearly 32% decline in net profits.

What Lies Ahead for the Indian Stock Market 

The Indian securities market is anticipated to experience significant volatility during this 6-day trading week, with key events such as the Fed’s decision and India’s Union Budget on February 1. Investors are hopeful for fiscal stimulus, particularly through income tax cuts in the Budget. If these expectations are met, it could trigger a relief rally in the market.

As of January 28, 2025, Gift Nifty Future was up 0.06%, trading at 22,939 at 08:17 AM, suggesting a subdued start to the trading session.

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