Dalal Street returned to losses on Friday after a brief recovery in the previous session, with the Indian stock market witnessing broad-based selling across sectors. Weak global cues, sustained foreign investor outflows and pressure on the rupee weighed heavily on investor sentiment, dragging both benchmark indices down by nearly 1%.

At the close, the S&P BSE Sensex fell 769.67 points to settle at 81,537.70, while the NSE Nifty50 slipped 241.25 points to end at 25,048.65. The market had shown signs of stability a day earlier after global markets calmed and geopolitical tensions linked to Greenland eased. However, the relief rally proved short-lived as selling pressure resurfaced on Friday.

Continued selling by foreign institutional investors (FIIs) emerged as the primary trigger for the decline. Foreign investors have been steadily reducing exposure to Indian equities, with net sales of Rs 36,591.01 crore recorded in January 2026 alone. Although domestic institutional investors (DIIs) attempted to cushion the fall by buying shares worth Rs 50,720.15 crore during the same period, their support was insufficient to fully counter FII outflows.

Market experts noted that the Nifty remains under technical pressure. According to Kranthi Bathini, Director – Equity Strategy at WealthMills Securities, the index has failed to sustain above the 25,500 mark and is now trading close to the critical 25,000 support zone, which has earlier acted as a key rebound level.

Selling pressure was more pronounced in midcap and smallcap stocks, reflecting growing risk aversion among investors. The Nifty Midcap 100 index declined 1.49%, while the Nifty Smallcap 100 fell 1.52%. Market volatility also spiked, with India VIX rising 6.49%, indicating heightened uncertainty.

Sector-wise, losses were widespread. Nifty Realty plunged 3.00%, while Nifty Media dropped 2.37%. Nifty PSU Bank declined 1.57% and Nifty Private Bank fell 0.99%. Other sectors such as Auto, Financial Services, FMCG, IT, Pharma, Healthcare, Oil and Gas, Metal and Consumer Durables also ended in the red.

Despite the weak market trend, a handful of heavyweight stocks managed to post gains. Hindustan Unilever emerged as the top Sensex gainer, rising 1.37%, followed by Asian Paints, Tech Mahindra, Titan Company and Tata Consultancy Services.

On the downside, Eternal Ltd led the losers with a 6% fall, while Adani Ports and Special Economic Zone, InterGlobe Aviation, Axis Bank and Power Grid Corporation also saw sharp declines.

Adding to market pressure, the Indian rupee slipped to a fresh all-time low of 91.77 against the US dollar, extending losses for the second consecutive session. A weaker currency raised concerns over higher import costs and inflation, further dampening investor confidence.

Market participants remain cautious in the near term, with experts advising investors to avoid panic selling amid elevated volatility. With the Nifty hovering near the crucial 25,000 support level, the market’s next move will largely depend on foreign investor flows, global cues and currency stability in the coming sessions.