January 2025 is shaping up to be a challenging month for Indian stock markets, with 2,461 BSE-listed firms experiencing value losses, surpassing the previous record set in March 2024. The BSE 500 index has declined by 6.5%, while foreign portfolio investors (FPIs) have withdrawn Rs 71,000 crore, amid rising U.S. yields and a slowdown in earnings. The Sensex and Nifty indices are down 12% from their highs, with sectoral indices falling more than 20%, indicating a bear market. However, recent trading sessions have shown some recovery, with the Sensex gaining over 600 points and the Nifty surpassing 23,100, snapping a three-day losing streak. Analysts are examining whether the current downturn in small and mid-cap stocks represents a bear market or a temporary blip, as discussions around potential capital gains tax cuts and market strategies continue.