Indian equity benchmarks extended their losing streak in early Friday trade, reflecting a confluence of global and domestic pressures that continue to unsettle investor sentiment. The Sensex declined 509 points to 77,155, while the Nifty slipped 126 points to 24,047 around 09:30 am, marking a cautious start after two consecutive sessions of losses.

The ongoing weakness in the market is not being driven by a single trigger but rather a layered combination of macroeconomic stress, global uncertainties, and sector-specific concerns. At the centre of this pressure is the sustained rise in crude oil prices, which remains a critical variable for India’s macro stability. Brent crude hovering near $106 per barrel has raised concerns about inflation, fiscal balance, and currency stability. Given India’s heavy reliance on oil imports, elevated crude prices directly impact input costs across sectors, especially transportation, logistics, and energy-intensive industries. More importantly, it compresses margins for companies and limits policy flexibility for the Reserve Bank of India.

Adding to this pressure is continued selling by foreign institutional investors. FIIs have remained net sellers for four consecutive sessions, with outflows exceeding Rs 3,200 crore in the latest session alone. This trend signals a broader shift in global risk appetite, where investors appear to be reallocating capital away from emerging markets amid rising geopolitical tensions and higher global commodity prices. Historically, sustained FII selling tends to weigh disproportionately on large-cap stocks, which is evident in the current correction seen in benchmark indices.

The IT sector has emerged as another key drag on the market. Stocks such as Infosys, TCS, and HCL Tech saw notable declines, pulling the Nifty IT index lower by over 1 percent. The weakness follows subdued management commentary and cautious guidance from major IT firms, reflecting slowing demand visibility in key global markets. Given that IT stocks hold significant weight in index composition, their underperformance is amplifying broader market declines.

Global cues remain mixed but fragile. US markets closed lower overnight amid ongoing geopolitical concerns and mixed corporate earnings. While there was some marginal improvement in sentiment following developments around the Israel-Lebanon ceasefire, it has not been sufficient to offset broader concerns around oil supply disruptions and geopolitical escalation risks. The uncertainty around US-Iran negotiations continues to be a key variable influencing crude prices and, by extension, global market direction.

Volatility indicators further highlight the cautious undertone in the market. India VIX rose above 18.8, indicating heightened uncertainty and risk aversion among investors. From a technical standpoint, the Nifty remains below its key resistance band of 24,300–24,400, suggesting a lack of strong bullish momentum. Immediate support is seen near the 24,000 level, and a sustained breach below this could trigger further downside.

Despite the weakness in headline indices, sectoral trends showed some divergence. Auto, PSU banks, and realty stocks witnessed selective buying interest, indicating that domestic cyclicals are still finding support. On the other hand, IT and pharma stocks remained under pressure, reflecting global demand concerns. Among index constituents, stocks like Coal India, Grasim, Nestle, and ONGC posted gains, while Cipla, Dr Reddy’s, Sun Pharma, and Infosys were among the laggards.

Interestingly, market breadth remained slightly positive, with advancing stocks outnumbering decliners. This suggests that while institutional selling is weighing on large-cap indices, retail and domestic investors are selectively accumulating stocks in pockets of the market.

From an India market perspective, the current correction appears to be macro-driven rather than fundamentally driven by domestic economic weakness. However, rising crude prices and FII outflows, if sustained, could begin to impact earnings expectations and valuations, particularly in sectors sensitive to input costs and currency movements.

Sectorally, energy and upstream companies may continue to benefit from higher crude prices, while sectors like aviation, paints, and FMCG could face margin pressure. IT and pharma sectors may remain volatile due to global demand uncertainties, while domestic-facing sectors like banking and auto could show relative resilience.