India’s equity markets continue to sell-off as earnings season begins to gather steam. The Nifty 50 index ended 320 points lower, just above the mark of 23,000.  The Sensex, on the other hand, shed as much as 1,230 points on Tuesday, January 21.

Sensex and Nifty went into Tuesday’s trading session after a positive start to the week on Monday. Donald Trump’s inaugural address after being sworn in as the 47th President of the United States did not go to the extent of extreme tariffs on China, but it did dwell upon tariffs, immigration and energy reserves.

The Nifty Midcap index too fell over 1,200 points or 2% during Tuesday’s trading session, while the Smallcap index shed over 2% as well. At one point, the benchmarks saw a sharp reversal from the lows of the day, making a high past the 23,400 mark, but selling resumed soon after, during an extremely volatile 30-minute stretch post noon.

With today’s drop, investor wealth worth over ₹7 lakh crore was wiped out.

Most of the extreme reactions were triggered by the reactions to earnings, which were either in-line or marginally fell short of expectations. Stretched valuations added to the trouble in such names.

Shares of Dixon Technologies fell 14% on Tuesday after reporting an in-line quarter, but brokerages like Goldman Sachs and Jefferies said that the risk-reward at the current price is unfavourable.

You can read more on that here.

The fall in Dixon also rubbed off on other EMS companies like Amber Enterprises, Kaynes Technologies, both of which fell up to 8% on Tuesday.

Food delivery aggregator Zomato Ltd. also reported results during market hours on Monday, where it spoke about a slowdown in its core food delivery business and its quick commerce unit Blinkit, which is likely to remain loss-making in the near-term, as investments accelerate for its store expansion plans.

Brokerages remain optimistic on the stock but with slightly lowered price targets. More on that here. The fall in shares of Zomato also hurt its peer Swiggy, which is yet to report its December quarter results and saw its biggest single-day fall since its listing last year.

Shares of Newgen Software were the top losers in the broader markets on Tuesday, declining as much as 17% after it reported its results on Monday. Brokerage firm Jefferies downgraded the stock to “underperform” and also cut its price target by 21%. Here is what Jefferies said about Newgen post its earnings, explaining the rationale behind its downgrade.

Additional pressure also came from stocks like Trent, which continued to witness a selling spree. The best performer on the Nifty 50 index in 2024 has turned out to be the worst performing stock of January so far, with a 17% drop. More on Trent here.

The market is also in caution mode ahead of the big heavyweight HDFC Bank’s results, which will be reported on Wednesday. Along with HDFC Bank, stocks like HUL, BPCL, will also be reporting their results on Wednesday.