CHENNAI: Indian equity markets ended the trading session on Friday with a noticeable retreat in benchmark indices as selling pressure intensified and investor caution deepened. The Nifty 50 index slipped below the critical 26,000 mark, trimming roughly 0.7 percent from its previous close, while the BSE Sensex also moved into negative territory and finished 604 points lower. Both indices reflected a clear risk-off mood among participants, driven by a broader sense of unease over global economic cues and domestic market flows.
Market breadth leaned toward the downside with more stocks declining than advancing and midcap and small-cap segments underperforming the main indices, signalling a widening of the negative sentiment beyond just large-cap names. According to market data, the index losses were broad-based as key sectors such as financials, banking and technology saw meaningful declines, dragging down overall index levels.
Investors appeared particularly wary as foreign portfolio investors continued to trim their equity holdings, contributing to sustained outflows that have weighed on sentiment throughout the initial weeks of the year. This trend of foreign selling compounded the caution already gripping domestic players, who were looking for fresh catalysts to arrest the recent slide. Global macro considerations also exacerbated the nervousness, with concerns about rising global interest rates and inflation dynamics in major economies prompting traders to reassess risk assets. The cautious stance was also evident in the intraday price action, where indices oscillated but ultimately gravitated toward session lows as selling interest grew late in the afternoon.
A closer look at individual stocks highlighted further weakness in heavyweight names. Major IT stocks and large private banks were among the notable laggards, reflecting worries over near-term earnings prospects and slowing business momentum in technology services. The real estate and industrial sectors also faced soft demand, while defensive plays such as certain consumer goods counters managed to hold up relatively better.
Amid this backdrop, technical analysts pointed out that key support levels were being tested, and any breach below these could prompt further selling in the sessions ahead. Market commentators noted that the psychological importance of the 26,000 level on the Nifty meant that its fall below this threshold could influence trader behaviour in the short term and trigger stop-loss orders programmed around that level.
"The markets remained under sustained pressure throughout the week, weighed down by elevated global trade uncertainty following renewed tariff-related remarks from US President Donald Trump," says R Ponmudi, CEO, Enrich Money, a brokerage and wealth management platform.
According to him, the possibility of higher import duties rekindled concerns over disruptions to global trade flows, dampening risk appetite across emerging markets, including India. Investors clearly adopted a risk-off stance, refraining from aggressive positioning, while defensive sectors offered only limited support.
"Overall sentiment stayed cautious, with market participants awaiting clearer signals on global policy direction and its broader economic impact," Ponmudi added.
The decline on Friday capped off a week where markets exhibited heightened volatility, with sharp swings and a lack of clear directional conviction. The absence of compelling domestic triggers, coupled with a cautious global narrative, restricted any sustained rebound attempts. Many participants conveyed that until there is greater clarity on big-picture drivers such as the policy path of major central banks and the flow of foreign funds, markets are likely to remain jittery and susceptible to bouts of profit-taking.