Indian Stock Market on 28.01.25

After weeks of turbulence, the Nifty index showed a glimmer of recovery, closing up 0.56% at 22829.15. However, the day was a rollercoaster, with the index swinging from a high of 23137.95 to a low of 22857.65, reflecting the volatile mood of the market. Meanwhile, the Sensex wrapped up the session at 75366.17, rising 0.71%, or 613.6 points, as buying interest in certain sectors, especially banking, kept the momentum alive.

On the flip side, the Midcap and Small-cap indices continue to struggle. The Nifty Midcap 50 dropped by 0.52%, and the Nifty Small Cap 100 faced a sharp 1.77% decline, closing at 16304.25. Small-cap stocks have been in the eye of the storm for months now, with the Nifty Smallcap 250 index flirting with a bear market, down nearly 20% from its September peak. It briefly dipped 3.9% on Tuesday before making a slight recovery, closing just 1.8% lower.

This ongoing selloff is a consequence of growing concerns over India’s economic and earnings slowdown, which has spooked foreign investors. Since the end of September, overseas investors have pulled more than $19 billion from Indian stocks, and January alone accounted for over $7 billion of that outflow. The fear gauge, or the NSE India Volatility Index, has spiked to its highest levels since August, signaling that caution is taking over investor sentiment.

But it’s not all bad news. After two days of declines, the Sensex and Nifty staged a mini-rebound, fueled by aggressive buying in the banking and rate-sensitive stocks, following the RBI’s decision to pump liquidity into the system. It’s a temporary lift in a sea of uncertainty.

As for precious metals, gold prices took a small step back, with 24-carat gold in India dropping ₹170 per gram to ₹8241.3. Over the past month, gold’s value has slipped by 5.56%, reflecting broader risk-off sentiment. Silver followed suit, falling ₹1000 per kg to ₹99500.

All in all, the market’s been a mixed bag. While the indices had some relief, the small-cap stocks continue to weigh down the overall sentiment, and the bigger picture remains clouded with volatility and investor caution.