Indian equity markets extended their losing streak on Friday, with significant selling pressure seen for the second straight session. Weak global cues, continued foreign fund outflows and caution ahead of key December-quarter earnings kept investors on the sidelines, dragging the Nifty below the 25,700 mark and pushing smallcap stocks sharply lower.
The Sensex fell over 600 points to an intraday low of 83,506.79, while the Nifty was down about 0.65% in intraday trade. Weakness was not limited to frontline stocks, as the BSE MidCap fell 0.6%. The BSE Smallcap fell over 1%.
Broad-based selling across sectors
The selling pressure was visible across sectors. The Nifty Financials, Auto and FMCG sector slipped over 1%, while metals, media, pharmaceuticals and real estate stocks also traded in the red.
Among Nifty 50 stocks, names such as Adani Enterprises, ICICI Bank, NTPC and Bajaj Auto were among the notable laggards during intraday trade.
3 reasons why markets are falling today
Here are three reasons why the markets are under pressure today
1. Geopolitical worries, trade deal uncertainty
Global developments have also weighed on investor sentiment, particularly uncertainty around trade relations between India and the United States. Adding to the tension, markets are closely watching developments related to US trade policies, including legal scrutiny of tariffs imposed during President Donald Trump’s tenure. According to Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, market participants are focused on the US Supreme Court’s verdict on the legality of these tariffs.
“After the sharp correction yesterday triggered by the possibility of about 500 % tariff on India under the provisions of the Russia Sanctioning Act approved by President Trump, the market will be focused on the verdict expected today from the US Supreme Court on the legality of Trump tariffs. There is a high probability of the verdict going against Trump. But the details are significant: that is, whether it would be a partial striking down of the tariffs or completely declaring the tariffs illegal. The market reaction would depend on the details. If the Supreme Court declares Trump tariffs illegal, there would be a rally in India since India has been the worst affected by the 50% tariffs,” added Dr. V.K. Vijayakumar.
He further noted, “In the sharp market pull back this week even stocks which will not be impacted by any draconian action by Trump have been affected. Segments like financials, consumer discretionary and industrials that have corrected due to the overall market weakness can be accumulated now for long-term investment.”
2. Q3 earnings uncertainty
Uncertainty around the upcoming third-quarter earnings has made investors reluctant to take fresh positions. With the results season kicking off, market participants are closely watching how large companies perform, beginning with Avenue Supermarts December-quarter numbers over the weekend. Major information technology firms such as Tata Consultancy Services, HCL Technologies and Infosys are set to announce their results next week.
Earnings growth has remained subdued for several quarters, and the December quarter is seen as an important checkpoint.
3. Foreign fund outflows add pressure
Continued selling by foreign investors is adding pressure on domestic equities. Foreign institutional investors have remained net sellers in the Indian market since July last year, and the trend has extended into January as well. In the first few days of the month, overseas investors have already offloaded shares worth more than Rs 8,000 crore in the cash segment.