Benchmark equity indices closed lower on Wednesday, extending their decline for a second consecutive session after markets witnessed their steepest single-day fall in more than eight months. Persistent weakness in global markets, lingering concerns over trade and geopolitical developments, and sustained selling by foreign institutional investors kept sentiment cautious throughout the trading day.
The Nifty 50 ended the session down 0.3 per cent at 25,157.5, while the BSE Sensex slipped 0.33 per cent to close at 81,909.63. Both benchmark indices hit fresh three-month lows during intraday trade, underlining the depth of selling pressure. The losses followed a sharp fall in the previous session, when the Nifty dropped 1.4 per cent and the Sensex declined 1.3 per cent.
Markets began the day on a weak footing and remained under pressure for most of the session. Early selling was triggered by negative global cues and investor nervousness over unfolding trade and geopolitical risks, which continued to cloud near-term outlook for risk assets.
Some buying interest emerged toward the end of the session, helping the benchmarks recover a portion of their intraday losses. However, the rebound lacked conviction and was insufficient to reverse the overall negative trend.
Commenting on the market performance, Vinod Nair, Head of Research at Geojit Investments Limited, said domestic equities remained volatile amid elevated global risks. He noted that bargain hunting at lower levels toward the close helped reduce early losses, but broader sentiment stayed fragile.
He added that weak earnings from banking and information technology companies continued to weigh on investor confidence. According to Nair, pressure from a depreciating rupee and uncertainty surrounding global trade relations could keep volatility elevated in the near term, although selective buying may emerge as the earnings season progresses and domestic demand shows resilience.
Asian markets also traded lower for the third consecutive session, reflecting subdued global sentiment. Investor confidence was dented by renewed tensions after Donald Trump reiterated threats related to Greenland and hinted at the possibility of fresh trade frictions with the European Union. These developments added to pressure on emerging markets, including India.
Disappointing quarterly results from several heavyweight companies further dragged market sentiment. Stocks such as Reliance Industries and ICICI Bank reported earnings that fell short of market expectations, while continued foreign fund outflows added to the selling pressure.
Out of the 16 major sectoral indices, 12 finished the day in negative territory. Banking, financial services and real estate stocks were among the worst performers, reflecting concerns over earnings and valuations. Metal and energy stocks managed modest gains but were unable to provide meaningful support to the broader market.
The broader market also witnessed sharper declines. The Nifty Midcap index fell 1.1 per cent and the Nifty Smallcap index dropped 0.9 per cent, with both ending at multi-month lows. The weakness highlighted reduced risk appetite among investors and broad-based selling across market segments.
Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, said markets remained under pressure for another session due to unfavourable global cues. He noted that the Nifty opened lower and slipped close to the 24,900 mark in early trade as it struggled to hold key support levels.
According to Mishra, some bargain buying in select large-cap stocks led to a brief intraday recovery, but the move lacked strength and the index ultimately closed lower at 25,157.50. He said most sectors ended in the red, with sentiment hit by global trade worries, tariff fears ahead of the US President’s speech at Davos, a sharp fall in the rupee to record lows, weak earnings, and persistent foreign investor selling.
From a technical perspective, Mishra pointed out that the Nifty closed near its long-term average around the 25,150 level after briefly slipping below it during the session. He identified the 24,750–24,900 zone as the next key support area, while any recovery is likely to face resistance in the 25,300–25,450 range.
Foreign investors have continued to reduce exposure to Indian equities. They have sold shares worth about $3.23 billion so far in January, following record outflows of nearly $19 billion in 2025. The ongoing selling pressure, coupled with global uncertainty and a weak rupee, has kept overall market sentiment fragile.
