The Indian equity market faced relentless selling pressure for the third consecutive session on Friday, January 10, marking the worst weekly performance in 2025. With bears firmly in control, the indices extended their losses, eroding investor wealth significantly.

The Nifty 50 shed 95 points to close at 23,431, registering a decline of 0.40%, while the Sensex dropped 241 points to end at 77,378, reflecting a 0.31% loss. This marked the indices’ fifth loss in six trading sessions.

The pain was more pronounced in the broader markets, with the Nifty Midcap 100 falling 1,160 points, or 2.08%, to 54,585. The index ended the week 5.77% lower, its sharpest weekly fall in over two months. The Nifty Smallcap 100 saw an even steeper decline, plunging 2.61% on Friday to a six-week low of 77,378, with a weekly loss of 7.29%.

In a week dominated by red, the Nifty IT index was the sole sectoral gainer, buoyed by a post-earnings rally in Tata Consultancy Services (TCS). TCS surged 6%-its biggest single-day gain in six months-on robust commentary, lifting other IT stocks such as Tech Mahindra, Wipro, Infosys, and HCLTech.

In contrast, the PSU Bank index nosedived 8%, leading the sectoral losers. All other sectoral indices ended in the red.

TCS surged 6% on strong earnings and commentary, setting the tone for gains in the IT sector. Delta Corp shares jumped 6% after the Supreme Court stayed GST show-cause notices amounting to Rs 1.12 lakh crore. IRCTC rose nearly 3% as Macquarie initiated an “outperform” rating. HCLTech, Britannia, Tata Consumer Products, and Wipro posted modest gains in an otherwise bleak market.

Shriram Finance slipped 4% as the stock traded ex-split. IndusInd Bank dropped 4% after Goldman Sachs downgraded the stock to “neutral” and cut its price target. Adani Wilmar tanked 10% as the Adani Group announced plans to sell a 20% stake through an offer for sale (OFS). Tata Elxsi, and IREDA both stocks fell up to 7% after reporting weak Q3 results.

The overall market breadth remained dismal, with the advance-decline ratio skewed heavily towards the bears at 1:6. Midcap and smallcap stocks bore the brunt of the sell-off, with companies like Kalyan Jewellers, PB Fintech, Paytm, and IREDA emerging as the top losers.

Weekly Recap

This week witnessed the largest decline in nearly a month, with the Sensex and Nifty dropping over 2% each. The Midcap 100 index slid nearly 6%, its sharpest weekly fall in more than two months.

A total of 36 out of 50 Nifty stocks delivered negative returns. Top losers included Shriram Finance, Trent, and NTPC, while TCS, HCLTech, Wipro, and Britannia emerged as the top gainers.

The broader market weakness was compounded by macroeconomic concerns, with the Rupee closing at a record low of 85.97/$, slipping further from Thursday’s close of 85.85/$.

Data indicates a trend of profit booking at higher levels, as evidenced by the indices’ inability to sustain gains. After a 2% rise on January 2, the indices lost momentum in subsequent sessions, closing 5 out of 6 trading days in the red.

The market carnage resulted in a staggering erosion of Rs 5.7 lakh crore in market capitalization of BSE-listed companies in Friday’s trade alone.

The sustained selling pressure and weak market breadth suggest that investors remain cautious amid rising global uncertainties and weak domestic cues. While IT stocks provided some relief this week, broader market concerns and profit booking at higher levels could continue to weigh on the markets in the near term.