Indian stock markets are likely to see a flattish start on January 21, 2026, following a significant downturn in the previous session. Both the Nifty 50 and the Sensex experienced substantial losses on Tuesday, influenced by escalating geopolitical tensions and consistent foreign fund outflows.
Market Performance on January 20, 2026
On January 20, the NSE Nifty 50 concluded the day down by 353 points, a 1.38% decrease, settling at 25,232.50. Similarly, the BSE Sensex tumbled 1,065.71 points, or 1.28%, to close at 82,180.47. This decline marked a more than three-month low for both indices. The downturn was broad-based, with significant selling observed across various sectors, including realty, auto, and IT. The market capitalization of BSE-listed companies decreased by ₹9.86 lakh crore, reaching ₹4,55,82,683.29 crore.
Factors Influencing Market Sentiment
Several factors contributed to the negative sentiment:
- Global Cues: Asian stocks retreated, mirroring a selloff on Wall Street, which was triggered by renewed concerns over geopolitical tensions stemming from US President Donald Trump's stance on Greenland and potential tariff implications. Weak cues from European markets, where major indices were down by over 1%, further dampened investor confidence.
- Foreign Fund Outflows: Persistent selling by Foreign Institutional Investors (FIIs) continued to exert pressure on the market. In January, foreign investors offloaded Indian equities worth approximately $3 billion, marking the largest monthly outflow since August.
- Rupee Weakness: A weakening rupee further eroded investor sentiment.
- Technical Breakdown: According to experts, Nifty has formed a long bear candle on the daily chart, indicating a decisive breakdown of range movement at 25,500. The index is now expected to find support in the 25,100 to 25,100 range.
Expectations for January 21, 2026
- Flat Opening: The GIFT Nifty was trading near 25,300, early on January 21, suggesting a flattish start for Indian markets. The Nifty 50 futures contract rose 0.15% to 25,293, as of 6:46 a.m.
- Volatility: Analysts anticipate continued market volatility amid uncertainty surrounding the US-Europe tariff situation related to Greenland.
- Support and Resistance Levels: Immediate resistance for Nifty is expected around 25,500, with key support at the 25,000 level. A break below the 200-day EMA (25,160) and SMA (25,113) could lead to further selling pressure, potentially driving the index towards the 24,800-24,900 support zone. Conversely, breaching the 25,470-25,500 level could establish it as immediate resistance during any pullback attempts.
- Bank Nifty: Bank Nifty is holding above its rising channel support and the 20-day EMA near 59,000–59,200, preserving the underlying bullish structure. Immediate support lies at 59,700–59,600, followed by a stronger demand zone at 59,500–59,300. Resistance is placed at 59,900–60,000.
Trading Strategy
Given the current market scenario, a cautious approach is advisable. Technical analyst Vaishali Parekh from Prabhudas Lilladher recommended three intraday stocks: Ion Exchange India, TBZ, and EPL, each with defined stop-loss levels for risk management.
Overall, the Indian stock market is expected to remain range-bound with a slightly positive bias, contingent on its ability to sustain levels above the 59,500-59,700 support corridor.
