The bloodbath in the Indian stock market and heightened volatility this week were primarily driven by heavy selling pressure from Foreign Institutional Investors (FIIs), disappointing Q4 2025 results, and rising apprehensions over escalating crude oil prices.
This was further exacerbated by AI-related pressure on the IT sector and inflation data triggering a slide in banking and realty stocks.
On Friday, India’s equity benchmarks, Sensex and Nifty, plunged sharply. The BSE Sensex tumbled 961 points (1.17 per cent) to close at 81,287.19, while the Nifty 50 fell 318 points (1.25 per cent) to 25,178.65.
Nearly half of Friday’s losses came in the last 30 minutes of trade due to a late selling spree.
According to provisional BSE data, Friday’s bloodbath was triggered by broad-based selling, with FIIs offloading shares worth Rs 7,536.36 crore — their biggest single-day outflow in six months.
Banking and telecom sectors were the major drags, while broader indices BSE Midcap and BSE Smallcap declined 1.04 per cent and 0.89 per cent, respectively.
For the week, both benchmarks ended lower by 1.84 per cent (Sensex) and 1.54 per cent (Nifty). During February, the indices contracted up to 1.19 per cent — largely due to a massive sell-off in the IT sector. The Nifty IT index fell over 19 per cent, registering its worst monthly performance since 2008.
Investor sentiment weakened due to ongoing geopolitical tensions between the United States and Iran, along with underperformance by several heavyweight stocks, according to SVP-Research at Religare Broking.
Overall market breadth remained negative, with 2,528 stocks declining against 1,600 advancing on the BSE.
The late-hour selling on Friday wiped out nearly Rs 5 lakh crore in investor wealth. The NSE India VIX rose 4.89 per cent to 13.70, signalling intense volatility ahead.
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