Indian benchmark indices concluded their worst week in over three months, with both Sensex and Nifty declining 2.5% amid broad-based selling pressure that wiped out ₹15 lakh crore in market capitalisation from BSE-listed companies.

Market Performance Overview

The weekly decline represents the steepest fall since late September when indices dropped 2.7%. On January 9, the Nifty 50 closed at 25,683.30, down 0.75%, while the Sensex ended at 83,576.24, declining 0.72%.

Sectoral Impact and Major Movers

Fifteen of the 16 major sectors declined during the week, with oil and gas stocks leading the losses. The Defence index was the sole gainer, rising 1.3%, while India Tourism, Oil & Gas, and Energy indices shed over 5% each.

HDFC Bank, India's largest private lender and the heaviest-weighted stock, emerged as a significant drag on the market. The bank's shares slid 6.3% for the week, marking its worst weekly performance in nearly two years. This decline followed the bank's quarterly business update, which raised concerns over slower deposit growth. The stock's poor performance dragged the banks index down by 1.5% for the week and resulted in HDFC Bank losing over ₹1 lakh crore in market capitalisation.

Technical Analysis and Market Outlook

Technical analysts noted that the market has slipped below key moving averages, indicating increasing weakness. According to Amol Athawale from Kotak Securities, the market has formed a long bearish candle on weekly charts and is trading below short-term averages, which is largely negative.

The Nifty has moved lower from the 50 EMA, with market sentiment appearing decisively negative. Technical support levels are identified at 25,600-25,550, while resistance is placed at 25,850. Below the immediate support zone of 25,600, selling pressure could accelerate, potentially taking the market to 25,400-25,300 levels.

External Factors and Market Pressure

The selling pressure intensified following reports that US President Trump backed a bipartisan bill targeting countries doing business with Russia with up to 500% tariffs on imported goods. This development has particular significance for India, which has been the second-largest buyer of Russian crude after China, contributing to the broad-based selling in recent trading sessions.

Among mid-cap stocks, Premier Energies, Waaree Energies, Inox Wind, NBCC, and HPCL were among the top weekly losers, reflecting the widespread nature of the market decline across different segments and sectors.

Indian equity markets extended their losing streak to a fifth consecutive session on Friday, as investor caution intensified ahead of a pending US court ruling on the legality of Trump's proposed 500% tariffs on India. The sustained selling pressure, combined with persistent foreign fund outflows, weighed heavily on market sentiment.

Market Performance Overview

The benchmark indices closed significantly lower, reflecting the prevailing risk-off sentiment among investors.

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 highlights a shift from consolidation to a short-term corrective phase.

Broader Market Weakness

Market breadth remained decisively negative, underscoring the weak undertone across segments. The broader indices faced significant pressure with midcap stocks declining 0.7% while the smallcap index dragged close to 2%. Ajit Mishra from Religare Broking noted that the small-cap index has corrected 3.8% over the last two sessions.

Sectoral Performance and Stock Movements

On the sectoral front, oil & gas and IT indices posted modest gains, while realty and auto emerged as the top two losers. During the week, 15 of the major sectors declined, reflecting broad-based weakness.

Among Nifty 50 constituents, Asian Paints, ONGC, HCL Tech, and Bharat Electronics led the gainers, while Adani Enterprises, NTPC, Adani Ports, ICICI Bank, and Jio Financial Services emerged as major laggards. Heavyweight stocks HDFC Bank and Trent shed 6-10% during the week.

Foreign and Domestic Investment Flows

Investment flows continued to show divergent trends between foreign and domestic institutional investors.

Market Outlook and Expert Commentary

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. 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.

Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments, suggested there is a high probability the US court verdict will go against Trump's tariff proposals. Kaynat Chainwala from Kotak Securities emphasized that if the court rules against the tariffs, concerns over an intensifying trade war could ease, potentially providing relief to market sentiment.