The
Nifty 50 index has shed as much as 4.7 per cent from its all-time high of 26,373.20 hit on January 5, 2026 and is on track to record its worst performance in January in a decade, data shows.
The fall has taken the index near its 200-day moving average (200-DMA), and has slipped 3.5 per cent thus far in January 2026.
The index had registered its biggest fall of 4.8 per cent back in January 2016, data shows. In case the index continues on the downward spiral, it will also be the third biggest loss in January since 2011 when the index had tumbled over 10 per cent, shows data.
Analysts attribute the recent fall in the markets to geopolitical and tariff-related developments across the globe. Global geopolitics, suggest analysts at Prabhudas Lilladher, is redrawing global power and business equations and threatens to affect geographical boundaries. This, they believe, is leading to significant increase in business uncertainty and volatility more so for India, as sustained tariff row with the US and related news flows are disturbing the market momentum.
"Given the current phase of geopolitical uncertainty, markets are likely to remain cautious. We have seen a huge outperformance by large caps (16-17 per cent over the last 12 months) over mid/small caps, and we don’t expect this trend to change in the near-term. We value NIFTY at 3 per cent discount to 15-year average price-earnings (PE) of 18.7x with December 2027 earnings per share (EPS) of Rs 1,539 and arrive at 12-month target of 28,814 (29,094 earlier)," said Amnish Aggarwal, director for institutional research at PL Capital Group.
Meanwhile, the Nifty 50 index hit a low of 25,092 in intra-day trade on Wednesday as it tested the 200-DMA (25,124 levels) for the first-time since May 2025. The 200-DMA is considered as the key technical indicator that helps in identifying the long-term trend of the particular index or a stock. The trend is said to be positive as long as prices sustain above the key average, and vice versa.
That apart, every 1 in 2 Nifty stock is seen trading below the 200-DMA, including Reliance Industries, HDFC Bank, ICICI Bank, TCS, Hindustan Unilever, ITC, Adani Enterprises, Bajaj Finance, Eternal, ONGC and InterGlobe Aviation.
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From a trend perspective, analysts at SAMCO Securities suggest that the fall has dented investor's confidence as the index has slipped below all key short- and medium-term moving averages, including the 20-day, 50-day, and 100-day moving averages.
Nifty's 200-DMA, they said, also coincides closely with the 61.8 per cent Fibonacci retracement of the prior up-move. This confluence of long-term moving average support and Fibonacci retracement, they suggest, makes the 25,100–25,000 zone structurally critical for determining the next directional move.
"Daily super-trend has also turned into a major overhead barrier, further reinforcing the bearish undertone. Momentum indicators reflect growing downside pressure, with the daily RSI slipping sharply toward the 29–30 zone, indicating oversold conditions but not yet showing any meaningful signs of reversal," said Dhupesh Dhameja, derivatives research analyst at SAMCO Securities.
Nandish Shah, senior derivative and technical research analyst at HDFC Securities, too, cautions against a further fall. He expects the overall trend to remain negative as long as the index remains below 25,500 levels.
"The short-term trend seems bearish, as the Nifty has broken below the 25,500 - 26,300 range. It is just a matter of time before the Nifty falls below the 200-DMA. It is likely to head lower and could test 24,600 levels, with interim support around the 25,020 mark. This translates into a downside risk of 2.3 per cent from current levels," Shah said.
 "Nifty tests 200-DMA; on track for worst January show in a decade")
