**Market Brief: Volatility & Valuation Reset** **Date:** January 27, 2026 **The Big Picture** Indian equity markets are navigating a period of intense volatility and correction. While the **Sensex** managed a modest recovery to close near **81,664**, the broader sentiment remains cautious. The **Nifty 50** is trading under pressure, hovering near **3-month lows** around the **25,000** mark, weighed down by weak global cues and disappointing Q3 earnings from heavyweights like Reliance Industries and select IT majors. **Sector Split: Safety in Size?** A sharp divergence has emerged between large-caps and the broader market: * **Large-Caps:** Showing relative resilience. Investors are flocking to "blue-chip safety" amid global uncertainty. * **Mid & Small-Caps:** Witnessing a severe correction. The **Nifty Smallcap 100** has tanked approximately **7%** in January 2026 alone, while the **Midcap index** is down roughly **4%**. * **Valuations:** despite the fall, small-cap valuations hover around **25-26x** trailing earnings—still at a premium to long-term averages. **Key Triggers** * **Global Headwinds:** Escalating trade tensions, specifically renewed tariff threats from the US administration, have triggered a "risk-off" sentiment globally. * **FII Exodus:** Foreign Institutional Investors (FIIs) have been aggressive sellers, offloading over **₹32,000 crore** in the cash segment this month. * **Currency Pressure:** The Indian Rupee hit a record low, breaching the **91 per USD** mark, further impacting foreign investor confidence. **Expert Take: Focus on Fundamentals** Amidst the noise, market veteran **Gurmeet Chadha** (Complete Circle Consultants) advises against panic. * **Strategy:** Shift focus from "market capitalization" to "fundamental strength." * **Opportunity:** The correction is bringing quality stocks back to reasonable valuations. He points to banking majors (like HDFC Bank) and conglomerates trading at attractive forward multiples. * **Outlook:** Investors should adopt a **medium-to-long-term view** (3-5 years). The goal is to accumulate "compounding machines" rather than chasing quick multi-bagger gains in the current volatile environment. **Bottom Line** The market is currently punishing high-valuation stocks lacking earnings support. While the short-term trend is weak due to FII selling and global friction, the correction offers a gradual accumulation window for patient investors focusing on quality businesses. ... [Gurmeet Chadha market analysis](https://www.youtube.com/watch?v=Rdst1w2XhCo) ... The video provides specific insights from Gurmeet Chadha on navigating the current market volatility and identifying high-earning stocks. http://googleusercontent.com/youtube_content/0