Indian equity markets extended their losing streak for a fifth consecutive session on Friday, January 9, 2026, as heightened geopolitical tensions and global uncertainty continued to weigh heavily on investor sentiment. Benchmark indices Sensex and Nifty closed sharply lower, capping a bruising week in which investors saw nearly ₹13 lakh crore wiped off market capitalisation. Persistent selling pressure, driven by foreign outflows, global risk aversion, and caution ahead of key international developments, has left markets fragile and participants increasingly defensive.
The Sensex ended the day at 83,576.24, down 604.72 points, while the Nifty slipped to 25,683.30. Over the course of the week, the 30-share Sensex lost close to 2,200 points, reflecting sustained weakness since recent geopolitical events escalated global tensions. With key global cues lined up and domestic earnings season just beginning, market participants remained wary, preferring caution over aggressive positioning.
Benchmark indices weaken amid global uncertainty, foreign selling, and critical international cues
The prolonged decline in Indian equities has been closely linked to global developments, particularly rising geopolitical tensions that have unsettled risk appetite worldwide. Since the recent US military action, Indian markets have struggled to find support, with investors opting to reduce exposure to equities amid fears of broader global instability. The Sensex’s cumulative loss of more than 2,180 points since these events underlines the depth of concern gripping the market.
Adding to the uncertainty is the anticipation surrounding a crucial decision by the US Supreme Court on the validity of global tariffs imposed by former US president Donald Trump. The verdict, expected to be announced shortly, is being closely watched by investors across the world, as it could have far-reaching implications for global trade, inflation, and economic growth. Any outcome that reinforces trade barriers could further dampen sentiment, particularly in emerging markets such as India that are sensitive to global capital flows.
Alongside the court ruling, key macroeconomic data from the United States is also in focus. The release of non-farm payroll and unemployment figures is expected to provide fresh clues about the health of the US labour market and the future policy path of the Federal Reserve. Stronger-than-expected data could reduce expectations of rate cuts, potentially strengthening the dollar and triggering further outflows from emerging market equities. Conversely, weaker data could revive hopes of monetary easing, offering some relief to global markets.
Asian markets presented a mixed picture, offering little directional support to Indian equities. South Korea’s KOSPI traded marginally higher, while Japan’s Nikkei index registered notable gains, reflecting selective optimism in certain pockets. Hong Kong’s Hang Seng index also edged higher, though mainland China’s Shanghai Composite slipped into negative territory, highlighting uneven sentiment across the region. Overnight, US markets ended mixed, with the Dow Jones closing higher, the S&P 500 barely positive, and the Nasdaq slipping, indicating caution among global investors ahead of key developments.
Foreign institutional investors continued to exert pressure on Indian markets. On January 8 alone, foreign investors sold shares worth ₹2,544.47 crore, extending a trend of sustained outflows. In December 2025, FIIs had sold equities worth over ₹34,350 crore, followed by sales of ₹17,500 crore in November. These persistent outflows reflect global risk aversion and portfolio rebalancing, particularly in the face of uncertain geopolitical and monetary conditions.
Domestic institutional investors, however, have continued to provide a degree of support. On January 8, DIIs purchased shares worth ₹2,817.93 crore, partially offsetting foreign selling. Over recent months, domestic investors have emerged as a stabilising force, buying heavily even as foreign funds exited. In December, DIIs invested nearly ₹79,620 crore, while in November they bought shares worth over ₹77,000 crore, underscoring the growing role of domestic capital in cushioning market volatility.
Earnings season, IPO activity, crude oil surge, and cautious outlook shape near-term sentiment
While global factors dominated sentiment, domestic developments also influenced market dynamics. The corporate earnings season for the third quarter has begun, with several companies set to announce results. Investors remained cautious ahead of earnings from government-backed IREDA and private players such as Tejas Networks, Globus Spirits, and Triton Corp. Stock-specific movements are expected as companies reveal their financial performance, but broader market direction is likely to remain influenced by global cues rather than individual earnings in the near term.
Primary market activity also continued despite the weak sentiment in secondary markets. In the mainboard segment, the initial public offering of Bharat Coking Coal opened for subscription, drawing attention from investors tracking government-backed disinvestment and resource-sector plays. In the SME segment, Deferral Technologies’ IPO also opened, reflecting ongoing interest in smaller companies despite overall market volatility. However, analysts caution that IPO appetite could remain selective if broader market weakness persists.
Commodity markets added another layer of complexity. Crude oil prices surged sharply, with Brent crude climbing more than 3 percent to around $62 per barrel, while US crude traded above $58. Rising oil prices are a double-edged sword for Indian markets. While energy stocks may benefit, higher crude prices raise concerns about inflation, current account pressures, and fiscal strain for a net oil-importing economy like India. Although some analysts expect crude prices to moderate in the coming days, the near-term spike has added to investor unease.
Market experts have advised investors to remain cautious, pointing to technical signals that suggest continued weakness. The Nifty’s break below the 25,900 level is seen as a negative indicator, signalling vulnerability in the near term. According to analysts, sustained recovery is unlikely unless the index manages to reclaim and hold above this level. Until then, volatility is expected to persist, with sharp intraday moves driven by global news flow.
Certain sectors are expected to remain particularly volatile. Information technology stocks are sensitive to developments in the US economy and currency movements, while metal stocks are closely tied to global growth prospects and commodity prices. With uncertainty surrounding trade policies, economic data, and geopolitical developments, these sectors may continue to see sharp swings.
The broader erosion of investor wealth over the week underscores the scale of the correction. With nearly ₹13 lakh crore wiped out, sentiment has turned cautious, especially among retail investors who have been active participants in the market rally over recent years. Experts suggest that while long-term fundamentals of the Indian economy remain intact, short-term risks are elevated, warranting a disciplined and patient approach.
As markets navigate this challenging phase, attention remains firmly on global developments, particularly decisions and data emerging from the United States, as well as the trajectory of geopolitical tensions. Until clarity emerges on these fronts, Indian equities are likely to remain under pressure, with investors prioritising risk management over aggressive buying.
