Markets opened lower on Friday after three straight sessions of gains, with investors turning cautious ahead of key domestic and global developments. Both the Sensex and the Nifty slipped in early trade despite the Economic Survey projecting strong growth for the Indian economy.
The weakness was led by selling in metal and IT stocks, while broader markets also came under pressure. Market participants appeared to be booking profits and reducing risk as Budget Day approached.
At around 9:30 am, the S&P BSE Sensex was down 516.43 points at 82,049.94. The NSE Nifty50 fell 192.75 points to 25,226.15.
MARKET FALLS DESPITE POSITIVE ECONOMIC SURVEY
The fall in equities came even as the Economic Survey projected robust growth for the Indian economy in the coming years. However, traders chose to stay cautious, focusing more on near-term risks such as foreign selling, currency weakness and global uncertainty.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said markets are currently facing both positive and negative factors.
“As we near the Budget Day there are headwinds and tailwinds for the market. Geopolitical issues continue to plague global trade with continuous threats of tariff weaponisation by Trump. The spike in Brent crude to near $70 is a headwind for Indian macros in general and industries that use oil as inputs, in particular,” he said.
At the same time, Vijayakumar pointed out that the Economic Survey’s growth outlook offers support to markets over the medium term.
“GDP growth of 6.8 to 7.2% in FY27 and headline inflation of around 3.5% suggest nearly 10% nominal GDP growth. This can deliver 15 to 17% earnings growth in FY27, which gives resilience to the market,” he said, adding that a slowdown in foreign portfolio investor outflows could signal a shift in strategy.
WHY IS STOCK MARKET FALLING TODAY?
One of the key reasons for today’s fall is continued selling by foreign investors. Foreign portfolio investors have sold Indian equities worth Rs 43,686.59 crore in January so far. This follows record outflows of nearly $19 billion in 2025.
On January 29 alone, foreign institutional investors sold shares worth Rs 394 crore. In contrast, domestic institutional investors stepped in as buyers, purchasing equities worth Rs 2,638 crore.
Ajit Mishra, SVP Research at Religare Broking Ltd, said investor sentiment remains cautious.
“Market sentiment stayed cautious as investors awaited key domestic events, including the upcoming Union Budget. Global uncertainty, mixed corporate earnings and continued foreign institutional selling weighed on risk appetite, while weakness in the Indian rupee added to the cautious undertone,” Mishra said.
He also advised investors to stay selective in the current environment and avoid chasing short-term recoveries.
The rupee also remained under pressure, which weighed on overall market sentiment. The currency opened at 91.9125 against the US dollar, almost unchanged from its previous close of 91.9550. It touched an all-time low of 91.9850 on Thursday.
The rupee is down around 2.3% so far this month and is heading towards its worst monthly performance since September 2022.
At the Economic Survey 2026 press briefing, Chief Economic Adviser Venkatramanan Anantha Nageswaran said the rupee’s fall needs to be seen in a global context.
“Currency depreciation that we are witnessing today is not something unique to India. Countries which have a current account deficit have seen their currencies depreciate,” he said.
Investors remain cautious as a weaker rupee can raise input costs for companies and add pressure on inflation-linked sectors.
Selling pressure was not limited to frontline indices. Broader markets saw sharper losses as investors reduced exposure to midcap and smallcap stocks ahead of the Union Budget.
Just after the opening bell, the Nifty Midcap 100 was down 1.07%, while the Nifty Smallcap 100 slipped 1.41%. Market volatility also increased, with India VIX rising 3.04%.
On the Sensex, ITC Ltd was the top gainer, rising 0.88%. Hindustan Unilever Ltd gained 0.74%, followed by Asian Paints Ltd at 0.71%. Sun Pharmaceutical Industries Ltd rose 0.70%, while Adani Ports and Special Economic Zone Ltd added 0.46%.
On the losing side, Tata Steel Ltd fell 3.34%. IT stocks also came under pressure, with HCL Technologies Ltd down 2.00%, Infosys Ltd slipping 1.68%, Tata Consultancy Services Ltd losing 1.26%, and Tech Mahindra Ltd down 1.16%.
Sectoral indices largely traded in the red. Nifty Metal saw a sharp fall of 4.12%, while Nifty IT dropped 1.53%. Nifty Auto declined 0.54%, Nifty Financial Services 25/50 fell 0.62%, and Nifty Realty slipped 1.18%. Nifty Oil and Gas was down 0.96%, while Nifty PSU Bank eased 0.93%.
A few pockets showed resilience. Nifty FMCG was up 0.19%, while Nifty Pharma and the Nifty Healthcare Index both gained 0.04%.
Overall, the market mood remains cautious as investors await clarity from the Union Budget and track global developments, currency movement and foreign investor flows.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
