Indian equity markets faced sustained selling pressure on Friday, January 9, 2026, as the Nifty declined 0.75% to close at 25,683 amid weak global cues and broad-based selling across sectors. The session witnessed significant divergence in institutional investor behavior, with foreign investors continuing their selling spree while domestic institutions provided crucial support to the markets.

Institutional Investment Flows

Foreign Portfolio Investors (FPIs) net sold Indian equities worth ₹3,769.00 crore during the session, while Domestic Institutional Investors (DIIs) net bought shares worth ₹5,596.00 crore. The detailed trading activity shows the scale of institutional participation during the volatile session.

For the month so far, the trend of foreign selling and domestic buying has continued, with FPIs net offloading ₹11,783.00 crore while DIIs have accumulated ₹17,902.00 crore worth of Indian equities.

Market Performance and Sectoral Impact

The Nifty experienced an initial uptick before coming under sustained selling pressure throughout the session. The decline was broad-based, with realty, financials, and auto stocks emerging as key laggards. The broader markets faced even more significant pressure, reflecting heightened risk aversion among investors.

The sharp decline in broader market indices indicates cautious participation across all market segments, with investors showing preference for defensive positioning.

Technical Analysis and Market Outlook

According to Ajit Mishra, SVP Research at Religare Broking, market sentiment remained subdued due to multiple factors including elevated geopolitical concerns and global trade-related uncertainties. The persistent foreign institutional selling and weakness across broader risk assets further compounded the negative bias in the markets.

From a technical perspective, the decline has disrupted the short-term upward movement in the Nifty, with the index now retesting its medium-term support zone near the 100 DEMA around the 25,600.00 level. Key technical levels to watch include:

• Support levels: 25,450.00 and 25,300.00 if the current support breaks
• Resistance level: 20 DEMA around 26,000.00 on the upside
• Critical support: 100 DEMA near 25,600.00

Market experts recommend a selective approach with controlled position sizing and balanced exposure in the current environment, given the ongoing volatility and mixed global cues affecting investor sentiment.

Indian equity markets endured a challenging week as multiple US-driven concerns triggered widespread selling pressure across sectors. The benchmark Nifty 50 recorded its sharpest weekly decline since September 2025, falling 2.50% to close at 25,683.30 on Friday and slipping below the psychologically significant 26,000 mark.

Market Performance and Key Triggers

The market faced a trio of negative developments from the United States that dampened investor sentiment throughout the week. US Commerce Secretary Howard Lutnick's announcement on Friday signaled a potential delay in the India-US trade agreement, adding to existing concerns about bilateral trade relations.

Further pressure emerged from the proposed Sanctioning Russia Act of 2025, which advanced in Congress and threatens tariffs of up to 500% on countries continuing to purchase Russian oil. This development raised significant concerns about India's economic growth prospects and overall market stability.

Sectoral Performance Analysis

While the broader market retreated across all five trading sessions, sectoral performance showed notable divergence. Consumer durables emerged as the sole outlier, rising 2.40% during the week, driven by festive demand spillover and positive third-quarter expectations for companies like Havells and Polycab.

The oil and gas sector bore the brunt of tariff-related anxiety, with Reliance Industries experiencing a significant 7.40% decline that erased nearly $15.00 billion in market capitalization. This substantial loss highlighted the sector's vulnerability to international trade policy developments.

Global Context and Currency Impact

India's market performance stood out negatively on the global stage, recording the steepest declines among major developed and emerging markets. This contrasted sharply with several Asian peers, including South Korea, Taiwan, and Indonesia, which managed to end the week in positive territory.

The Sensex logged its worst start to a new year in a decade, falling nearly 2.00% in the first seven trading sessions. This performance marked a significant deterioration compared to the previous year, when the index saw only a marginal decline of 0.70% during the same period.

Upcoming Earnings Season and Market Outlook

Market attention will now shift to the December-quarter earnings season, which begins next week with IT sector heavyweights Tata Consultancy Services and HCL Technologies scheduled to report results on Monday. Nearly 40 Nifty 500 companies are expected to announce third-quarter FY26 results, with major players including Infosys, Wipro, and Reliance Industries likely to influence broader market sentiment.

The IT sector faces particular scrutiny as companies navigate seasonal furloughs and margin pressures following a subdued second quarter. Early positive results from these bellwether companies could potentially reinforce the earnings recovery narrative and provide much-needed support to market sentiment.

Investors will also closely monitor the December retail inflation data release scheduled for Monday, along with a key US Supreme Court ruling on American tariffs, both of which could provide additional direction for market movements in the coming sessions.