At the close of trade, the S&P BSE Sensex fell 769.67 points to settle at 81,537.70, while the NSE Nifty50 declined 241.25 points to end at 25,048.65.

Dalal Street slipped back into the red on Friday after a brief recovery in the previous session. Indian equities witnessed sharp selling through the day, with both benchmark indices shedding nearly 1%.

Negative global cues, sustained foreign institutional investor outflows, and broad-based sectoral pressure weighed heavily on market sentiment.

By the closing bell, the S&P BSE Sensex declined 769.67 points to 81,537.70, while the NSE Nifty50 fell 241.25 points to settle at 25,048.65.

Markets had advanced in the previous session as global sentiment improved, with Asian and US equities closing higher. Investor confidence was also supported by easing geopolitical concerns related to Greenland. However, the optimism proved short-lived, as selling pressure resurfaced on Friday.

Why the stock market fell today

A key factor behind the decline was continued selling by foreign institutional investors (FIIs). Overseas investors have been steadily exiting Indian equities for several weeks. In January 2026 alone, FIIs sold shares worth ₹36,591.01 crore, keeping markets under sustained pressure.

Domestic institutional investors (DIIs) attempted to cushion the fall by purchasing equities worth ₹50,720.15 crore during the same period. Despite this support, their buying was insufficient to fully counterbalance foreign outflows.

Market participants noted that the Nifty is struggling to hold crucial support levels. Kranthi Bathini, Director – Equity Strategy at WealthMills Securities Pvt Ltd, said fresh selling is underway as foreign portfolio investors continue to offload holdings. He pointed out that the Nifty failed to sustain the 25,500 mark and is now hovering near 25,050, with 25,000 emerging as a critical support zone where the index had earlier found buying interest.

Midcaps and smallcaps underperform

The sell-off extended beyond frontline stocks, with midcap and smallcap segments witnessing sharper declines in the afternoon session. The Nifty Midcap 100 fell 1.49%, while the Nifty Smallcap 100 slid 1.52%, reflecting rising investor risk aversion.

Market volatility also picked up sharply. The India VIX surged 6.49%, indicating increased uncertainty and nervousness among investors.

Sector-wise performance

Selling pressure was widespread, with all sectoral indices ending in the red. Nifty Auto declined 0.86%, while Nifty Financial Services 25/50 slipped 0.94%. Nifty FMCG fell 0.35% and Nifty IT eased 0.19%.

The steepest losses were recorded in Nifty Media, which tumbled 2.37%, and Nifty Realty, which dropped 3.00%. Nifty PSU Bank fell 1.57%, Nifty Private Bank declined 0.99%, and Nifty Pharma slipped 0.89%. The Nifty Healthcare Index lost 0.75%, Consumer Durables dipped 0.32%, Oil & Gas declined 1.02%, and Nifty Metal fell 0.43%.

Sensex gainers and losers

Amid the broad market weakness, a handful of stocks managed to post gains. Hindustan Unilever Ltd emerged as the top Sensex gainer, rising 1.37%, followed by Asian Paints Ltd (up 1.18%), Tech Mahindra Ltd (up 0.84%), Titan Company Ltd (up 0.83%), and Tata Consultancy Services Ltd (up 0.60%).

On the downside, Eternal Ltd was the worst performer, plunging 6.00%. Adani Ports and Special Economic Zone Ltd dropped 5.74%, InterGlobe Aviation Ltd declined 4.07%, Axis Bank Ltd fell 2.32%, and Power Grid Corporation of India Ltd slipped 2.27%.

Rupee hits fresh record low

Adding to investor concerns, the Indian rupee touched a new all-time low on Friday. The currency weakened as strong dollar demand from corporates and importers outweighed early gains.

The rupee fell to 91.77 against the US dollar, breaching its previous record low of 91.7425 seen on Wednesday. It was down around 0.2% during the session. A weaker rupee typically raises worries about higher import costs and inflation, further dampening market sentiment.

What investors should do

Market experts are advising investors to remain calm and avoid panic-driven decisions. Short-term volatility is expected to persist due to global uncertainties, sustained foreign selling, and currency weakness.

Long-term investors are encouraged to focus on fundamentally strong companies with stable earnings and refrain from reacting to daily market fluctuations. With the Nifty hovering near the crucial 25,000 support level, the market’s near-term direction will hinge on whether this level holds and if foreign investor selling shows signs of easing. For now, caution continues to dominate sentiment on Dalal Street.