70% of Nifty 500 stocks in red in Jan 2026: What’s next for Indian markets?
Indian stock markets fetch carried their international uncertainty-related anxiety into calendar 12 months 2026 (CY26), with most Nifty 500 stocks nursing losses up to now in January.
In accordance to ACE Equity recordsdata, as many as 70 per cent of the Nifty 500 stocks fetch yielded destructive returns until January 13, 2026. Right here’s the 2d-worst performance by the pack all the intention thru this duration over the closing 5 years since CY20.
Earlier, in CY25, up to 88 per cent of Nifty 500 stocks were in red all the intention thru the corresponding duration versus 50-75 per cent of Nifty 500 stocks that eked out positive aspects in CY20, CY21, and CY22.
At the index level, the Nifty 500 index has slipped 1.6 per cent so far in January 2026 while the benchmark Nifty 50 index is down 1.5 per cent.
With this, the Indian markets fetch also prolonged their underperformance vis-a-vis international peers so far in January 2026. US indices admire the S&P 500 fetch acquired nearly about 2 per cent until January 12 while Japan’s Nikkei index in Asia has posted 12 months-to-date (YTD) returns of more than 6 per cent.
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“This divergence shows heavy foreign institutional investor (FII) promoting, US tariff threats, and international exchange uncertainty, along with synthetic intelligence (AI)-driven rallies and protection enhance benefitting the US and desire Asian markets,” talked about Devarsh Vakil, head of Prime Research, HDFC Securities.
Tepid market breadth in 2026
As many as 348 stocks from the Nifty 500 index fetch declined so far in January, with Godfrey Phillips stock being the worst hit. The scrip is down 20 per cent up to now.
ITC, Elecon Engineering, Tejas Networks, Signatureglobal (India), Cohance Lifesciences, NBCC (India), Ather Energy, Jupiter Wagons, Schneider Electrical Infrastructure, and GE Vernova T&D India are some of the more than a few effectively-known laggards, having dropped in the fluctuate of 13-17 per cent all the intention thru the duration.
Additionally, over 60 per cent or 302 out of the Nifty 500 stocks fetch broken their long-time duration 200-day shifting moderate (200-DMA) on the technical chart, suggesting caution among traders.
In basic, stocks shopping and selling below 200-DMA are talked about to be shopping and selling with a destructive bias. This long-time duration indicator is passe to desire the pattern for an underlying stock or index.
One other key technical indicator — the Relative Energy Index (RSI) — shows that 8 per cent or 40 stocks from the Nifty 500 index are shopping and selling in the “oversold” territory.
On a scale of 0-100, a reading below 30 is thought of as “oversold” while a reading above 70 is claimed to be “overbought” on a 14-day RSI indicator.
Toll road ahead
In accordance to Vakil of HDFC Securities, Indian equity markets fetch largely discounted the present negatives, and are taking a glimpse ahead to the Union Funds 2026-27, and the earnings for the third quarter of 2025-26 (Q3FY26) to revive sentiment, with hopes skewed more in opposition to the latter.
“Markets fetch tempered expectations from the Q3 earnings season, anticipating modest development amid persistent sectoral headwinds. Sustained earnings momentum, on the more than a few hand, might per chance catalyse a decisive turnaround in market sentiment, fostering renewed investor self assurance,” Vakil talked about.
If truth be told, in the absence of any unexpected complications — namely from international shocks — markets are developing for an earnings development-led restoration in the approach time duration, he added.
As for the Funds, analysts agree with persevered tax simple assignment, capital expenditure push, an MSME-benefit kit, and doable tax incentives (per chance on capital positive aspects) might moreover take dangle of market sentiment, nonetheless fiscal constraints limit the scope of any main stimuli.
“A tactical enchancment in market sentiment is imaginable, nonetheless a though-provoking, sustained reversal in breadth is unlikely with out earnings upgrades. The Union Funds, on the total, drives sector rotation in want to a market-huge take dangle of, benefiting capex-linked, defence, railways, or rural issues selectively. Within the period in-between, Q3 outcomes so far point to resilience in pockets admire banking and desire defensives, nonetheless they fetch got not been sturdy enough to interchange aggregate earnings expectations,” talked about Sonam Srivastava, founder and fund manager at Wright Research PMS.
Thus, until outcomes surprise meaningfully on margins or quiz commentary, any restoration is liable to dwell narrow and sentiment-driven, she added.
Analysts mediate markets are transitioning trusty into a part where returns might be lower, nonetheless more basically grounded. Investors, they suggested, must reset their expectations as the market is in the approach of rebuilding its inaccurate before the next durable pattern emerges.
