Dalal Street experienced a subdued start to trading on Friday morning as benchmark indices slipped into negative territory. The BSE Sensex recorded a decline of 132.98 points, or 0.18%, opening at 74,182.63. Similarly, the NSE Nifty50 fell by 25.65 points, or 0.11%, settling below the 23,000 threshold at 22,968.55. This opening followed a notably strong performance on Thursday, which saw both indices register their most significant single-day gains in four months.
The previous session’s rally, which saw the Sensex jump 1,533.72 points and the Nifty50 gain 374.65 points, was largely attributed to a rebound in the global artificial intelligence trade and positive earnings-driven sentiment. Declining US Treasury yields and shifting market conditions further bolstered investor confidence during that session. However, the momentum faced a slight correction as Friday trading commenced.
Market participants are currently navigating a complex environment shaped by various domestic and international factors. Foreign institutional investors have maintained a selling trend, with year-to-date outflows from Indian equities reaching $32.8 billion. Meanwhile, the Securities and Exchange Board of India (SEBI) recently announced a reversal of its plans regarding the closing auction session for derivatives. The regulator stated it would instead utilize volume-weighted average prices from the final 30 minutes of regular trading to settle expiring contracts, a move designed to mitigate volatility following feedback from traders.
Crude oil prices have also influenced market sentiment, showing slight volatility amid ongoing tensions in the Middle East and discussions surrounding potential US adjustments to restrictions on oil-carrying vessels. On Friday, Brent crude declined by 0.52% to $105.40 per barrel, while West Texas Intermediate fell 66 cents to $97.31. These movements come after a volatile week where inventories and geopolitical concerns heavily impacted energy markets.
Despite the broader market dip on Friday, certain large-cap sectors showed resilience in early trading. Information Technology stocks were among the prominent gainers on the BSE Sensex. Tech Mahindra led the rise, climbing 5.46% to Rs 1,738.70. Other significant performers included Infosys, which advanced 3.73% to Rs 1,152.45, and Tata Consultancy Services, which saw an increase of 2.86% to reach Rs 2,421.85. Bharti Airtel, HCL Technologies, and Mahindra & Mahindra also recorded gains in the early hours.
Broader Asian markets have mirrored some of this recovery, with equities rising approximately 1% in early trade on Friday as investors returned to the technology sector following a sell-off earlier in the week. The easing of bond yields has provided some relief to these regional markets, helping to offset concerns regarding stretched valuations in the artificial intelligence sector and persistent inflation pressures.
Moving forward, analysts suggest that the direction of the Indian stock market will continue to be influenced by global technology stock performance, interest-rate expectations, and further developments in oil markets. Investors are expected to keep a close watch on how the revised derivatives settlement mechanism functions during upcoming expiry days, as the market balances recovery signals against lingering economic risks.
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