The Indian equity markets faced a significant downturn on Friday, marking a second consecutive session of losses. The Sensex dropped by 1,048 points, or 1.25%, settling at 82,626, while the Nifty fell by 336 points, or 1.30%, to close at 25,471. This decline was primarily attributed to growing global concerns regarding AI-driven disruptions to India’s outsourcing sector.
The broader markets mirrored the benchmark indices’ performance, with the Nifty Midcap 100 index falling by 1.71% and the NSE Smallcap 100 declining by 1.79%. Across all sectors, there were losses, with the Nifty metal index experiencing the most significant drop at 3.31%, followed by Nifty realty at 2.23%.
Amidst the sell-off, Nifty NEXT 50 also witnessed substantial downward pressure, tumbling by 1.56%. The Nifty IT index, after initially declining by over 4%, managed to recover more than 1,000 points from its daily low, closing down by 1.44%. Additionally, the Nifty FMCG sector saw a decline of 1.90%.
The banking and midcap stocks were not immune to the market pressure, as evidenced by the negative market breadth, with 44 out of the 50 Nifty constituents ending the day in the red. The rupee traded slightly weaker against the dollar at 90.61, with market participants noting a flat dollar index near 97, maintaining a range-bound momentum.
Analysts observed that while defensive sectors displayed some resilience, they were unable to counterbalance the widespread selling pressure, indicating a cautious and risk-averse sentiment among investors. The Nifty’s performance saw it opening lower and dropping below key moving averages, with attempts to fill the previous week’s gap on the downside.
According to Vatsal Bhuva, a technical analyst at LKP Securities, the Bank Nifty slipped below a short-term consolidation range, signaling minor profit booking post a recent uptrend. However, the index managed to stay above its crucial 20-day moving average near 59,700, serving as significant short-term support.
