Why the Stock Market Crashed Today: 5 Key Reasons for the Sudden Sell-Off (January 23, 2026)

23, January 2026. By -Kaushik

The global financial markets witnessed a sharp “bloodbath” on Friday, January 23, 2026, leaving investors in a state of panic. On the domestic front, Indian indices—the BSE Sensex and NSE Nifty 50—plunged nearly 1%, with the Sensex crashing over 750 points and the Nifty slipping below the crucial 25,100 mark.
​This downturn has wiped out lakhs of crores in investor wealth in a single session. If you are wondering why the share market is falling today, here is a detailed breakdown of the primary catalysts behind this sudden crash.

1. Rupee Hits Record Low (92/$ Threshold)
​The Indian Rupee (INR) dealt a massive blow to market sentiment today by hitting a fresh all-time low of 91.99 against the US Dollar. Currency weakness is a major red flag for foreign investors as it erodes the value of their returns. The relentless demand for dollars from importers and corporate entities, coupled with a strengthening US Dollar Index, has put the Rupee under immense pressure, triggering a sell-off in equities.
​2. Persistent FII Selling (The 13-Day Streak)
​Foreign Institutional Investors (FIIs) have been on a relentless selling spree. Today marked the 13th consecutive session of net selling by FIIs in January 2026. Data shows that they have offloaded equities worth over ₹36,500 crore this month alone. While Domestic Institutional Investors (DIIs) are trying to provide a cushion, the sheer volume of foreign outflows is overwhelming the market’s buying capacity.
​3. Geopolitical Uncertainty Over “Greenland” and Tariffs
​Global markets remain on edge due to a lack of clarity regarding the US–NATO deal over Greenland. While US President Donald Trump recently eased some military rhetoric, the ambiguity surrounding trade tariffs and the strategic future of the territory has kept volatility (India VIX) high. European markets also opened lower today as leaders brace for potential shifts in trans-Atlantic relations.
​4. Weak Q3 Earnings and Sectoral Drags
​The ongoing Q3 earnings season has been a mixed bag, failing to provide the “growth trigger” investors were hoping for. Major heavyweights reported disappointing numbers:
​Adani Enterprises & Adani Ports: These were the top drags today, falling over 5% following fresh market concerns.
​Aviation Sector: IndiGo (InterGlobe Aviation) saw a sharp decline after reporting a significant drop in net profit.
​Banking & Realty: Large-cap banks like Axis Bank and the entire Realty Index (down over 3%) faced heavy profit booking.
​5. Pre-Budget 2026 Caution
​With the Union Budget 2026 just around the corner, investors are moving into a “wait-and-see” mode. There are growing concerns regarding:
​Potential changes to LTCG (Long Term Capital Gains) tax rationalization.
​Limited scope for increased government capital expenditure (Capex).
​Speculation that the government may not announce enough measures to boost immediate consumer demand.

​Is This a “Buying Opportunity” or a Deeper Crash?
​Technical analysts suggest that the Nifty is currently hovering near its 200-day Exponential Moving Average (EMA). ​Is This a “Buying Opportunity” or a Deeper Crash?
​Technical analysts suggest that the Nifty is currently hovering near its 200-day Exponential Moving Average (EMA). While the immediate trend is bearish, the 24,800–25,000 zone is expected to act as a strong support level.
​For long-term investors, such corrections are often healthy as they flush out “weak hands” and bring valuations down to more reasonable levels. However, with the market being “net short,” volatility is expected to continue until the Budget announcement.
​What should you do? Focus on defensive sectors like FMCG and IT (which showed some resilience today) and avoid catching “falling knives” in highly leveraged sectors until the dust settles.

the immediate trend is bearish, the 24,800–25,000 zone is expected to act as a strong support level.
​For long-term investors, such corrections are often healthy as they flush out “weak hands” and bring valuations down to more reasonable levels. However, with the market being “net short,” volatility is expected to continue until the Budget announcement.
​What should you do? Focus on defensive sectors like FMCG and IT (which showed some resilience today) and avoid catching “falling knives” in highly leveraged sectors until the dust settles.

Disclaimer:

This blog does not provide financial, investment, or trading advice. All content is for educational and informational purposes only. Please consult a certified financial advisor before making any investment decisions. The author will not be responsible for any financial losses incurred.