With global cues turning negative and FII selling picking up pace, India’s equity market has come under a severe bear grip with the benchmark indices – BSE Sensex and NSE Nifty50 – sliding up to 2.45% this week. On Friday, the Sensex tanked 961.42 points or 1.17% to settle at 81,287.19 while the Nifty tumbled 317.90 points or 1.25% to end at 25,178.65.
Vinod Nair, Head of Research, Geojit Investments, said that the lack of progress in US–Iran nuclear talks has intensified concerns of further escalation of Middle East tensions, while persistent AI‑related uncertainty is also supporting safe‑haven flows.
Domestically, a risk‑off tone prevails as the earnings season winds down and global macro factors take precedence. Although IT stocks are witnessing selective low‑level buying after recent corrections, the broader trend remains subdued. With FIIs staying cautious and volatility likely to resurface, markets may continue to trade within a narrow range, added Nair.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,466 crore on Thursday. On Friday, the selling escalated and FII net sales stood at Rs 7,356 crore.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart, said that the decline is largely driven by global risk aversion, subdued institutional participation, and profit booking following the recent recovery.
“Elevated US bond yields, uncertainty around the global interest rate trajectory, and mixed economic data from major economies have kept sentiment fragile. Persistent geopolitical tensions between the US and Iran, along with volatility in crude oil prices, are further weighing on confidence as traders trim positions ahead of key domestic and global triggers,” said Gour.
Going forward, he added that investors should closely track global bond yields, crude oil trends, and currency movements, particularly the rupee against the dollar. The market is also expected to react on the Q3 GDP numbers that came after trading hours on Friday. The Q3FY27 GDP growth estimate stood at 7.8%.
Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Group, said that the better-than-expected numbers have clear market implications. “For equities, the improved growth impulse strengthens the outlook for corporate earnings, especially for cyclical and domestic-demand-oriented sectors. For the debt market, stronger real growth — even with moderate nominal expansion — improves the outlook for government finances by supporting tax collections and reducing fiscal slippage risks,” added Hajra.
Realty, auto and FMCG stocks fell the most on Friday, while the IT pack showed some resilience and managed to end on a flat note. The broader markets also witnessed profit booking, with both midcap and smallcap indices declining by around 1% each, reflecting cautious sentiment among participants. Market breadth remained firmly negative -- out of the Nifty 500 universe, only around 110 stocks closed in the green, while nearly 387 ended in the red, pointing toward broad-based weakness across the market.
Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, said that from a technical perspective, Nifty has now slipped below its 200-day EMA, a key long-term trend indicator. This breakdown underscores that sellers remain firmly in control, with price action suggesting a potential retest of the 25,000 zone in the near term if weakness persists.