Foreign institutional investors (FIIs/FPIs) net sold ₹2,550 crore worth of Indian equities on January 22, while domestic institutional investors (DIIs) provided strong counterbalance by net buying ₹4,223 crore worth of shares, according to provisional exchange data. Despite the foreign selling pressure, Indian equity markets managed to end the session on a positive note amid volatile trading conditions.

Institutional Investment Flows

The institutional trading activity on January 22 showed a clear divergence between foreign and domestic investors:

For the year-to-date period, the trend continues with FIIs being net sellers worth ₹36,587 crore, while DIIs have net purchased shares worth ₹50,718 crore, highlighting the sustained support from domestic institutional investors.

Market Performance and Volatility

Indian equity markets ended January 22 on a volatile but positive note despite choppy trading and cautious sentiment. The benchmark indices showed resilience:

Market breadth remained positive throughout the session, indicating selective buying interest among investors. The Nifty 50 opened strongly and touched an intraday high of 25,435 but failed to sustain higher levels due to selling pressure at elevated zones. The index subsequently slipped below the 25,300 support level, hitting an intraday low of 25,168, before recovering to close at 25,289.90.

Technical Analysis and Key Levels

According to Choice Broking's market analysis, the Nifty managed to hold above its 200-day DEMA, highlighting underlying support despite the intraday volatility. Key technical levels for the Nifty include:

• Immediate Resistance: 25,400–25,450 zone
• Key Support: 25,100–25,150 zone
• Daily RSI: 33.82 (trending upward, signaling mild momentum improvement)

The Bank Nifty also demonstrated similar volatility patterns, opening strong and surging nearly 850 points to an intraday high of 59,573.10 before witnessing profit booking that dragged the index below 59,000 to an intraday low of 58,823. The index later recovered to close at 59,200, indicating buying interest on declines.

Volatility and Market Sentiment

Market volatility showed signs of easing, with India VIX declining 3.12% to 13.35, indicating reduced fear among market participants. Derivatives data revealed heavy call writing at the 25,400 strike and significant put writing at the 25,200 strike, establishing this range as a key near-term pivot for the markets.

Indian equity markets are experiencing significant pressure, but the underlying reasons have more to do with global dynamics than domestic weaknesses, according to Deven Choksey, Managing Director of DRChoksey Finserv. Speaking on January 21, 2026, Choksey provided insights into the current market environment and sectoral challenges facing investors.

Global Forces Drive Market Correction

Choksey attributes the recent market correction primarily to global portfolio rebalancing activities. Investors are reducing their exposure to dollar-linked assets, which has created widespread selling pressure across emerging market equities, including India. This global shift has resulted in what Choksey describes as a disconnect between stock prices and actual business fundamentals.

Despite the technical weakness visible in market charts, Choksey emphasizes that underlying business conditions in India remain "extraordinarily robust." Corporate earnings continue to demonstrate strength, and operating performance across various sectors maintains healthy momentum.

IT Sector Faces Valuation Challenges

The mid-tier IT sector, including companies like Persistent Systems, is currently experiencing pressure due to elevated valuations rather than fundamental business issues. Choksey's analysis reveals no concerns regarding business fundamentals or earnings performance in this segment.

The IT sector correction appears to be primarily valuation-driven and could persist as the significant re-rating experienced over the past two to three years requires absorption through time correction and price adjustments.

Consumer and Alcohol Stocks Under Pressure

Consumer and alcohol stocks, including United Spirits, face particular vulnerability in the current environment. Choksey notes that even minor earnings disappointments can trigger sharp de-rating when stocks are priced for perfection. Policy uncertainties related to taxes, duties, or regulatory changes can lead to sustained pressure on these highly valued stocks.

Investment Strategy Recommendations

In this challenging environment, Choksey stresses the importance of patience and maintaining investments in quality companies rather than reacting to short-term market volatility. He characterizes the current situation as "collateral damage" caused by currency-related volatility and global uncertainty, rather than fundamental deterioration in Indian business conditions.

The market expert advises investors to focus on the strong corporate earnings and healthy operating performance across sectors, while acknowledging that the valuation-driven correction may require time to resolve through natural market mechanisms.