The Indian stock market experienced a sharp decline on Friday morning, with the Sensex falling approximately 516 points to 82,049 and the NSE Nifty50 slipping 193 points to 25,226, amid growing investor caution ahead of the Union Budget.
Markets opened lower after three consecutive days of gains, with traders showing restraint due to mounting global and domestic uncertainties. Early trading saw significant selling in metal and IT stocks, while broader markets also faced pressure.
Despite the positive outlook projected in the Economic Survey, which anticipates strong growth for India in the coming years, investors appear wary of near-term risks such as foreign selling, currency weakness, and global economic turbulence.
Experts Cite Multiple Factors Behind the Fall
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, highlighted that the market is navigating a mix of headwinds and tailwinds. While geopolitical tensions and rising crude oil prices—Brent crude nearing $70—pose challenges, the economic growth outlook offers some support. He noted, “GDP growth of 6.8 to 7.2% in FY27 and inflation around 3.5% suggest nearly 10% nominal GDP growth, which can lead to 15-17% earnings growth in FY27.”
Main Reasons for the Market Decline
- Continued Foreign Selling:
Foreign institutional investors (FIIs) have been net sellers, offloading over Rs 43,686 crore in January amid record outflows of nearly $19 billion in 2025. On January 29 alone, FIIs sold shares worth Rs 394 crore, while domestic investors bought Rs 2,638 crore, indicating cautious risk appetite. - Weakening Rupee:
The rupee opened at 91.9125 against the US dollar, close to Thursday’s low of 91.9850, and has depreciated around 2.3% this month. The currency’s decline, driven by global factors, is raising input costs for companies and adding inflationary pressures, further dampening sentiment. - Global and Domestic Uncertainty:
Investors remain cautious ahead of the upcoming Budget, with increased volatility in the markets. Broader indices saw sharper declines, with midcap and smallcap stocks falling over 1%. Sectoral performance was mixed, with metals and IT stocks leading declines—Nifty Metal plunging 4.12% and Nifty IT dropping 1.53%.
Market Highlights
- Top gainers included ITC (+0.88%), Hindustan Unilever (+0.74%), and Asian Paints (+0.71%).
- Major losers were Tata Steel (-3.34%), HCL Technologies (-2.00%), Infosys (-1.68%), and Tata Consultancy Services (-1.26%).
- Sector-wise, metals, IT, auto, and financials declined sharply, while FMCG and healthcare sectors showed resilience.
Market analysts advise investors to stay cautious and selective amid ongoing global uncertainties, currency fluctuations, and upcoming fiscal policy announcements as the market braces for the Budget.
