Sensex, Nifty down nearly 1% as metals drag indices amid weak global cues
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Benchmark indices S&P BSE Sensex and NSE Nifty 50 tumbled on Friday, erasing most of the gains from the preceding three sessions. The sell-off was triggered by a combination of weak global cues, renewed selling by foreign institutional investors (FIIs), and pre-Budget jitters. As of 1:30 pm, the Nifty 50 was trading 0.74% lower, struggling to maintain key support levels.
While several sectors showed resilience earlier in the week, the Nifty Metal index emerged as the day's primary laggard, plunging as much as 6% during intraday trade. Leading the losers' pack were heavyweights like Hindalco , Tata Steel , Coal India , and ONGC . Analysts attribute the sharp decline in metals to aggressive profit booking after a recent rally fuelled by geopolitical concerns and high base metal prices.
Global headwinds and FII pressures
The domestic slump mirrored a broader global retreat. In the US, a sharp sell-off in the Nasdaq index—driven by concerns over high-leverage AI investments—put immediate pressure on Indian IT stocks, which declined up to 2%. Asian markets followed suit, with Japan’s Nikkei 225 and Hong Kong’s Hang Seng trading in the red.
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This volatility coincides with warnings in the Economic Survey 2025-26, which notes that the global financial system is currently "less coordinated and more risk-averse". The survey highlights a "paradox" where India's strong internal fundamentals are colliding with a global environment that no longer rewards macroeconomic success with stable capital inflows. This is validated by FIIs, who have remained net sellers for most of January, barring a brief pause earlier this week.
Energy and budget caution
Adding to the uncertainty, crude oil prices reached a five-month high on Thursday. Markets remain wary of potential supply chain disruptions as geopolitical tensions escalate.
Domestically, investor sentiment is dominated by the upcoming union budget, which Finance Minister Nirmala Sitharaman is scheduled to present this Sunday. A special trading session has been scheduled by both the BSE and NSE on Sunday.
The Economic Survey highlights that India’s potential growth has been upgraded to 7%, up from 6.5% previously, citing sustained domestic reforms and public investment. However, the survey also warns about a "binding constraint" in infrastructure and the need for "strategic sobriety" in the face of global shocks.