Indian equities saw one of the sharpest selloffs in recent months as panic selling wiped out billions of rupees in just a few hours. On Thursday, January 8, 2026, the BSE Sensex dropped 780.18 points, or 0.92 percent, and closed at 84,180.96. The NSE Nifty 50 fell even harder in sentiment terms, losing 263.90 points, nearly 1 percent, to settle at 25,876.85. The fall below the 26,000 level shook confidence badly, as traders and investors see this mark as an important psychological support.
The speed of the fall shocked the market. Selling pressure stayed intense through the session and did not allow any meaningful recovery. Many stocks hit day’s lows near the close, showing nervousness was still high.
The selloff destroyed a huge amount of investor wealth. In a single trading session, Indian equity markets lost around ₹8 lakh crore in market value. Over the last four trading sessions combined, the total erosion reached nearly ₹9.19 lakh crore. This fall pulled down the total market capitalisation of all BSE-listed companies to about ₹472 lakh crore.
Mid-cap and small-cap stocks suffered more than large-cap names. These segments usually fall faster when fear rises, and the current selloff followed that pattern clearly. Many retail-heavy stocks saw sharp cuts, and buyers stayed away for most of the day.
Fresh worries around global trade triggered the selloff. Market sentiment turned negative after renewed concerns over U.S. tariffs on Indian goods. Reports said U.S. President Donald Trump threatened additional tariffs, linking them to India’s purchases of Russian oil. At the same time, delays in finalising an India–U.S. trade agreement added to uncertainty.
Export-focused sectors felt the heat immediately. Investors feared higher tariffs could hurt earnings outlook for several industries. This fear spread quickly across the market, even to sectors not directly linked to exports.
Foreign institutional investors played a big role in the market fall. On Wednesday alone, foreign investors sold Indian equities worth 15.28 billion rupees, or about $170 million. January has already seen total foreign outflows of roughly $694 million. Data also showed foreign investors sold shares worth ₹1,527.71 crore in a single day and around ₹5,760 crore so far this month.
This selling followed heavy outflows seen throughout 2025. Continuous foreign selling creates pressure on prices and weakens overall market liquidity. When foreign money exits fast, domestic investors often struggle to absorb the supply.
The selloff did not stay limited to one or two sectors. Metals and IT stocks led the losses, reflecting worries about global growth and demand. Banking and financial stocks also came under pressure as risk appetite dropped. When rate-sensitive and global-linked sectors fall together, markets usually signal deeper concern.
Defensive stocks offered little protection during the session. Even traditionally stable names saw selling as investors rushed to cut exposure and raise cash.
The fall damaged key technical levels on the charts. The Nifty breaking below 26,000 made traders more cautious. Analysts now see immediate support around 25,700. If selling continues, the index could drift toward the 25,600 to 25,500 zone. On the upside, 26,000 may act as a strong resistance level in the near term.
Volatility indicators also started moving up. Rising volatility often signals fear and uncertainty, and it makes short-term trading more risky. Many traders reduced positions as price swings became wider.
The market did not crash because of a single big event. Instead, the speed and scale of the fall made it stand out. Losing several lakh crore of market value in hours, and nearly ₹9 lakh crore over four days, left investors stunned. This happened after a phase where large-cap stocks stayed resilient despite global risks, so the sudden reversal felt more painful.
The selloff also hit across the board, not just in weak or overvalued stocks. That made confidence drop fast.
Markets will now look for clarity on trade-related developments. Any positive news on tariffs or the India–U.S. trade deal could calm nerves quickly. Until then, headlines will continue to drive short-term moves.
Foreign investor behaviour remains crucial. A slowdown in selling, or even small buying activity, could help markets stabilise. If outflows continue at the current pace, pressure may stay high.
The ongoing earnings season will also matter a lot. Strong results and positive guidance from large companies could provide support. Weak numbers or cautious outlooks may trigger another round of selling.
For now, uncertainty dominates the mood. Investors are cautious, liquidity feels tight, and confidence looks shaken. Markets may stay volatile in the near term, and recovery may take time, not days.