The Indian equity market wavered at the start of the week, with the NSE Nifty 50 and BSE Sensex opening lower before recovering some ground. The Nifty hovered around 22,966, while the Sensex remained 68 points higher at about 76,007 at 3:33 PM IST today after an early dip. Despite this recovery, the underlying sentiment remains cautious as investors weigh global and domestic triggers.
Sectoral performances were mixed, with the Nifty Pharma and Healthcare indices outperforming, gaining 0.4%. This reflects investors’ preference for defensive stocks amid market volatility. On the other hand, Bank Nifty slipped 262 points, highlighting persistent weakness in the banking sector. M&M, Tata Steel, and Hero MotoCorp led the losses, while Sun Pharma, Cipla, and Bajaj Finserv emerged as key gainers.
The broader trend remains under pressure due to Foreign Institutional Investor (FII) outflows, which have intensified in 2025, with Rs 1.16 lakh crore being pulled from Indian equities. A key factor behind this exodus is the appreciating U.S. dollar, which has reduced the attractiveness of emerging market assets. “A modest single-digit earnings growth doesn’t deserve high valuations. This is the basic reason behind the relentless FII selling,” notes a market strategist. The situation is expected to stabilize only with stronger earnings growth and a softer dollar.
From a technical perspective, the market is at a critical inflection point. A research head highlights that the recent three-day decline in the Nifty mirrors a pattern seen in March 2023, which preceded a multi-month bull run. The 22,700-22,800 level is pivotal, and a breakout above 24,051 (the 200-day moving average) would signal strength. However, resistance remains strong between 23,050 and 23,150.
Adding to market concerns, gold prices have also seen a sharp 1.3% decline over the past week, with 24K gold now priced at Rs 84,880 per 10 grams. This drop reflects shifting global dynamics, including easing inflationary pressures and expectations of stable interest rates.
While there are positive signals such as peace prospects in Ukraine, falling oil prices, and potential RBI rate cuts, the market remains at a crossroads. Investors are watching for triggers that could provide sustained upward momentum, with earnings performance and global currency trends likely to dictate the next big move.
