January often surprises investors, and this year was no different.
Why January is tough for many investors
Over the past ten years, the Indian market has ended January in the red on eight occasions. The main reason is that foreign institutional investors (FIIs) tend to sell more than they buy during this month.
FII selling activity
- FIIs were net sellers in seven of the last ten Januaries.
- Big outflows occurred in 2022 (‑Rs 33,303 cr), 2023 (‑Rs 28,852 cr), 2024 (‑Rs 25,744 cr) and a record‑high in 2025 (‑Rs 78,027 cr).
- Only in 2018, 2020 and 2021 did FIIs act as net buyers.
This consistent caution from overseas investors often drags the market down.
Domestic investors step in
- Domestic institutional investors (DIIs) were net buyers in eight of the last ten Januaries.
- Strong inflows were seen in 2022 (Rs 21,928 cr), 2023 (Rs 33,412 cr), 2024 (Rs 26,744 cr) and a record‑high in 2025 (Rs 86,592 cr).
- Their buying helped offset the heavy foreign selling, especially in 2025.
Nifty outlook based on option data
The December‑expiry Nifty rollover settled at 37.8%, below the previous 40% and the 3‑month (41.8%) and 6‑month (51%) averages, suggesting cautious trading.
Option interest shows a strong call buildup around the 26,100‑26,200 level, while puts cluster near 26,000 and 25,800. This points to a likely trading range of 25,800–26,200 for the current expiry.
Bottom line
Foreign investors are still wary in January, but domestic funds are stepping up, providing a buffer for the market. The Nifty’s near‑flat movement reflects this balance.
Remember, this is my view, not a prediction. Do your own research before making any investment decisions.