Indian equity markets faced significant selling pressure on Friday, extending their losing streak to a fifth consecutive session. The benchmark indices witnessed substantial declines, with both the Sensex and Nifty 50 falling by 0.71% each during the trading session.

Market Performance Overview

The day's trading session saw the Sensex dropping approximately 600 points, while the Nifty 50 closed below the psychologically important 25,700 level. This decline contributed to a challenging week for Indian markets, with both indices erasing nearly 2.5% of their value over the five-day period.

Key Market Pressures

Three primary factors contributed to the sustained selling pressure across Indian markets. Investor nervousness intensified ahead of a potential US Supreme Court ruling regarding Donald Trump's tariff powers, creating uncertainty about future trade policies and their impact on global markets.

Foreign institutional investors continued their selling spree, adding to the downward pressure on equity prices. This persistent outflow of foreign capital has been a recurring theme affecting market sentiment and liquidity conditions.

Trade Relations Uncertainty

Renewed concerns over India-US trade relations emerged as another significant factor weighing on market sentiment. The uncertainty surrounding bilateral trade policies and potential changes in trade dynamics contributed to the cautious approach adopted by investors.

The combination of these three headwinds created a challenging environment for market participants, resulting in broad-based declines across various sectors and market segments. The sustained nature of the selling pressure, spanning five consecutive sessions, highlighted the depth of investor concerns regarding both domestic and international factors affecting the Indian equity markets.

Indian equity markets extended their losing streak for the fifth consecutive session on Friday, with both benchmark indices experiencing sharp declines amid a confluence of domestic and global factors weighing on investor sentiment.

Market Performance Overview

The trading session began with gap-down openings for both major indices, reflecting negative sentiment from the market's start. Despite some intermittent buying pressure during the session, both indices ultimately succumbed to selling pressure.

Key Factors Behind Market Decline

Foreign Institutional Investor Selling

Foreign Institutional Investors continued their selling spree on Thursday, offloading equities worth ₹3,367 crores. This marked the fourth consecutive session of net selling by FIIs, who remain major players in India's financial markets and significantly influence market direction.

US Tariff Concerns and Trade Tensions

Investor attention focused on the US Supreme Court ruling regarding the legality of tariffs imposed by Trump. The potential ruling could require the US government to refund nearly $150 billion to importers if tariffs are declared illegal. Market participants are particularly concerned about Trump's hints at higher tariffs on Indian goods due to India's Russian crude purchases, including potential 500% tariffs under the Russia Sanctions Act.

Commodity and Currency Pressures

Rising crude oil prices added to market concerns, with Brent crude climbing 0.53% to $62.32 per barrel. Higher crude prices typically increase India's import costs and fuel inflationary pressures, negatively impacting equity markets.

The Indian rupee weakened significantly, falling 33 paise to 90.23 against the US dollar in Friday's trade after opening at 89.86. Forex traders attributed the currency pressure to sustained foreign fund outflows, rising crude prices, and concerns over potential US tariffs.

Technical Analysis Outlook

From a technical perspective, both indices face critical support and resistance levels:

Market Outlook

The ongoing concerns over potential US tariffs and stalled US-India trade talks continue to keep market sentiment fragile, particularly among foreign investors. The combination of geopolitical tensions, currency weakness, and commodity price pressures has created a challenging environment for Indian equities in the near term.