The Indian stock market seems to be under heavy pressure at the moment. On one hand, foreign investors are withdrawing money rapidly, on the other hand, the market is continuously showing weakness. The result was that crores of rupees were lost within a few months. Today, the major stock market index Sensex closed at 85,056.42 with a fall of 352.28 points. At the same time, Nifty 50 came at 26,042.30. The total market capitalization of companies listed on BSE decreased from Rs 475 lakh crore in the previous session to about Rs 474 lakh crore, due to which investors suffered a loss of about Rs 1 lakh crore in a single session, due to which everyone, from common investors to big players, are asking questions. Will this decline stop here or is there still more shock left?
Maximum selling by foreign institutional investors i.e. FIIs was seen in the IT sector. After this, sectors like FMCG, Power, Healthcare, Consumer Durables and Consumer Services also remained under severe pressure. Around Rs 2 lakh crore has been withdrawn from these few sectors alone. This clearly indicates that foreign investors are reducing risks not selectively but on a large scale.
Why are foreign investors running away?
A big reason is that the returns of the Indian stock market in 2025 have not been very strong. Whereas investors got better profits in markets like China, America, Japan and Europe. Foreign money goes only where returns and stability are seen. Apart from this, the dollar remained strong and the level of interest rates in America also continued to influence investment decisions.
Did IPO also harm the market?
Yes, its effect was also visible. Foreign investors withdrew money from the secondary market and invested large amounts in IPOs. That means the money which could have supported the stock market, went into new issues. While money is coming into domestic mutual funds through SIP, it is mostly limited to big companies and IPOs. Due to this, there was a huge decline in midcap and smallcap shares.
Is there hope for relief now?
Some experts believe that the situation may gradually improve. He says that if interest rates are cut in America and the dollar weakens, then foreign money can come to emerging markets again. Also, the average returns from the Indian market are looking better in the coming times, which may bring back the confidence of investors.
However, not all experts are so optimistic. Some brokerage houses say that Indian shares still look expensive and the pace of earnings is not very fast. In such a situation, it may take time for foreign investors to make a strong comeback.
What strategy should investors keep for 2026?
The coming year can be important in many ways. Experts are of the opinion that the next round may be based on earnings rather than value. The banking sector, especially government banks, seems to be in a better condition. Selective opportunities may arise after the fall in IT shares also. Apart from this, sectors like real estate, capital goods and telecom appear to have good strength in the long term. The advice for investors is not to panic and take decisions. It may make sense to invest gradually in a downturn with a long-term view, but it is important to understand the risks.
