Indian equities are reeling under pressure, with benchmark indices down more than 4 percent year-to-date in 2026. The exodus of FPIs, who dumped stocks worth Rs 36,500 crore since January, has been a major drag on market sentiment.
The past week saw a sharp 2.5 percent correction across major indices. Sensex closed Friday at 81,537, down 0.94 percent or 769 points, capping a weekly loss of 2.43 percent. Nifty settled at 25,048, off 2.51 percent for the week after a 0.95 percent daily decline.
Sectoral carnage was widespread: Realty nosedived 11.33 percent, while consumer durables, telecom, and discretionary stocks lost over 5 percent each. Mid and smallcaps fared worse, with Nifty Midcap 100 dropping 4.58 percent and Smallcap 100 cratering 5.81 percent. Bank Nifty’s slip below 58,800 support has technicians worried.
What began as routine profit-taking snowballed into panic selling, exacerbated by foreign outflows and international headwinds. U.S. tariff threats and geopolitical flare-ups, particularly comments on Greenland, spooked global investors. Elevated bond yields worldwide and U.S. court scrutiny of tariff disputes added to the uncertainty, prompting risk aversion.
A brief lift from strong quarterly numbers in IT and banking sectors was short-lived, overshadowed by weaker results elsewhere. The rupee’s depreciation to around 92/$ amplified concerns over inflation and import costs.
Market participants await cues from the 2026 budget and Fed rate decisions. Analysts foresee a pre-budget bounce as shorts unwind, but sustainable upturn requires global stability, better earnings, and positive fiscal signals.