Indian equity markets extended their losing streak to a fifth consecutive session on Friday, as investor sentiment remained subdued amid uncertainty over potential US-India tariff measures and escalating geopolitical tensions. The decline reflects growing caution among market participants ahead of a potential US Supreme Court ruling on tariff-related matters.

Market Performance Overview

The benchmark indices posted significant declines during Friday's trading session:

The Nifty 50 has corrected approximately 2.62% from its all-time high of 26,373 recorded on January 5, 2026, over the last four trading sessions. According to Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, this movement highlights a shift from consolidation to a short-term corrective phase.

Volatility and Broader Market Impact

Market volatility surged significantly with India VIX jumping 16% to close near the 11 mark, indicating heightened investor anxiety. The broader market indices faced substantial pressure during the session:

• Midcap Index: Declined 0.70%
• Smallcap Index: Fell approximately 2.00%

Ajit Mishra, SVP Research at Religare Broking, noted that the small-cap index has corrected 3.80% over the last two sessions alone.

Sectoral Performance and Stock Movements

Among sectoral indices, oil & gas and IT posted modest gains, while realty and auto sectors emerged as the top losers. During the week, 15 of the major sectors declined, though Bank Nifty outperformed relative to the broader market despite posting losses.

Top Performers and Laggards

Foreign and Domestic Investment Flows

Investment flows showed contrasting patterns between foreign and domestic institutional investors:

Market Breadth and Technical Indicators

Market breadth remained decisively negative, with 3,104 stocks declining against just 1,062 advances out of 4,342 stocks traded on the BSE. Additionally, 326 stocks hit 52-week lows compared with only 73 reaching 52-week highs, underscoring the weak market undertone.

Analyst Outlook

Vinod Nair, Head of Research at Geojit Investments, indicated that the market remains in a consolidation phase due to weak global cues and rising global bond yields. However, he noted that domestic GDP growth is expected to remain strong, and Q3 results should indicate a recovery led by midcaps, potentially stabilizing investor sentiment. Market participants are closely monitoring developments regarding US-India trade relations and awaiting key Q3FY26 IT earnings scheduled for release.

Indian equity markets continued their downward trajectory on Friday, with benchmark indices extending their losing streak to a fifth consecutive session and recording their worst weekly performance in over three months. Investor sentiment remained cautious amid concerns over potential US tariff hikes and sustained foreign fund outflows.

Market Performance Details

The Sensex declined 604.72 points, or 0.72%, to close at 83,576.24, slipping below the crucial 84,000 mark. During intraday trading, the index had fallen as much as 778.68 points to touch a low of 83,402.28. The Nifty dropped 193.55 points, or 0.75%, to settle at 25,683.30.

BSE-listed companies have collectively lost around ₹15 lakh crore in market capitalisation over the last five sessions of selling, highlighting the magnitude of the current market correction.

US Supreme Court Ruling in Focus

Investor attention has shifted to a key ruling expected from the US Supreme Court regarding Trump's use of emergency powers to impose tariffs. The court is set to decide whether Trump can invoke the International Emergency Economic Powers Act (IEEPA) to levy tariffs without congressional approval. During arguments held in November, the justices had indicated scepticism over the scope of presidential authority to impose such duties.

Technical Analysis and Market Outlook

Market analysts have provided technical perspectives on the current market situation. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, identified the 100-day exponential moving average (EMA) zone of 25,600-25,550 as immediate support for the Nifty.

Rupak De, Senior Technical Analyst at LKP Securities, noted that the Nifty has slipped further after moving below its 50-day EMA, indicating rising weakness. The index closed at a several-day low, with market sentiment appearing negative. In the short term, the trend may remain weak, with potential downside towards 25,550-25,500, while resistance is seen at 25,850.

Market Sentiment and Concerns

Ajit Mishra, Senior Vice President Research at Religare Broking, highlighted that sentiment remained subdued due to geopolitical and global trade-related concerns. The uncertainty around potential US tariff actions and related Supreme Court developments continues to weigh on investor confidence, contributing to the sustained selling pressure across Indian equity markets.