Equity benchmarks closed sharply lower with the BSE Sensex and NSE Nifty 50 shedding about 2.4 and 2.5 per cent, respectively, over the week as the broader markets suffered the steepest weekly fall in four months. However, the pain in the broader market was deep with small-cap and mid-cap index falling 4.5 per cent and 5.8 per cent respectively. The Nifty Next 50 also crashed 3.8 per cent, capturing the bleak picture of the market across-the-board.
According to analysts, geopolitical tensions due to US’ hard stance single handedly shook investors confidence. Unabated selling by foreign portfolio investors, weakening rupee and underwhelming performance from India Inc for Q3 so far, added to selling pressure.
According to Anita Gandhi, Head Institutional Equities, Arihant Capital Markets Ltd, among the major results that came in, there were more earnings misses than beats. Besides, higher Japanese yields might have also impacting India, due to unwinding of yen carry trade, she said.
Experts now pin hopes on the upcoming Budget and India-EU trade deal. A positive tweak on capital gains tax in the Budget will revive investors’ confidence , they added. As the US-trade deal is dragging, India-EU deal could help boost revival of Indian economy, especially human-intensive sectors such as auto and textile, analysts further said.
“While the US-India trade deal delay is sentimentally weak and impacting the Indian Rupee (INR) vs. peers, the progress in free trade agreement with Europe provides comfort,” said InCred Equities. The Government of India’s policy actions continue to strengthen, thereby providing hopes in the Union Budget for 2026-27, it added.
Retail and high net worth individuals prefer not to carry forward positions ahead of long weekend, she added.
On Friday, Sensex and Nifty 50 shed about 1 per cent each, snapping early gains despite supportive domestic PMI data and positive cues from global markets, as investors grappled with rising crude prices, plunging rupee and sustained foreign fund outflows.Sensex closed 769.67 points or 0.94 per cent lower at 81,537.70, and Nifty 50 fell by 241.25 points or 0.95 per cent to 25,048.65.
Vinod Nair, Head of Research at Geojit Investments Limited, said the broader sell-off was also driven by “earnings delivery falling marginally short of expectations amid premium India valuations,” adding that weakness in realty, PSU banks and Adani Group stocks further dragged sentiment ahead of the Union Budget and the US Federal Reserve’s rate decision.
Nilesh Jain, Head – Technical and Derivatives Research Analyst at Centrum Broking, said India VIX jumped 8 per cent to 14.30, signalling rising uncertainty, and warned that ahead of the monthly F&O expiry, volatility could stay elevated with Nifty moving in a broad 24,900–25,200 range.
The midcap100 and smallcap100 were down about 2 per cent. On the sectoral front, all indices ended on a negative territory. Nifty Realty and Media emerged as the top two sectoral losers, shedding over 2.5 per cent each. The former emerged as the worst performer this week, tumbling nearly 14 per cent.
Selective strength in pharma and metals offered limited support to the market, according to Gaurav Garg of Lemonn Markets Desk.
Dr Reddy’s leads Nifty 50, Adani stocks drag
Among the Nifty 50 constituents, Dr Reddy’s Lab, ONGC, Tech Mahindra, Hindalco, Hindustan Unilever and Bajaj Auto emerged as top gainers, while Adani Enterprises, Adani Ports, Eternal, InterGlobe Aviation and Jio Financial depreciated the most.
Market breadth remained sharply negative, highlighting the depth of the sell-off across Dalal Street. Of the 4,361 stocks traded on th eBSE, only 1,321 advanced while a steep 2,887 declined and 153 remained unchanged.
As many as 409 stocks hit their 52-week low compared with just 75 touching 52-week highs. In addition, 13 stocks hit the upper circuit while 10 hit the lower circuit.
Adani group stocks witnessed siginificant pressure on reports that the US markets regulator asked a court for permission to personally email summons to founder Gautam Adani and group executive Sagar Adani over alleged fraud and a $265 million bribery scheme.
Market experts emphasised that tepid Q3 earnings from index heavyweights such as ICICI Bank and HCL Technologies further weighed on the market sentiment.
In addition, shares of IndiGo, Premier Energies, Adani Energy Solutions, Adani Green Energy and Ujjivan Small Finance Bank staged strong movement due to Q3 performance.
Midcap and smallcap movers
Under the midcap segment, National Aluminium, Voltas, Ashok Leyland and APL Apollo Tubes gained 1-2 per cent, while Paytm, Premier Energies, HUDCO and ATGL slumped 5-8 per cent.
Among the smallcap stocks, Poonawalla Fincorp, Anant Raj, Tejas Networks, PNB Housing and Reliance Power fell sharply by 6-8 per cent, while Bandhan Bank and Laurus Labs soared 2-4 per cent.
On Thursday, Sensex ended 397.74 points higher at 82,307.37, while Nifty 50 gained 132.40 points to settle at 25,289.90. FIIs offloaded equities worth ₹2,549.80 crore, while DIIs bought stocks worth ₹4,222.98 crore, exchange data show.
Market participants braced for heightened volatility ahead of trading holiday on Monday on account of the Republic Day and the derivatives expiry on Tuesday.
Siddhartha Khemka – Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, empahasised that markets will continue to track developments around global trade negotiations and geopolitical dynamics, while stock-specific action is expected to remain driven by ongoing and upcoming Q3 earnings announcements. such Kotak Mahindra Bank, Ultratech cement and Axis Bank expected over the weekend.
Published on January 23, 2026
