Indian Stock Market Faces Significant Decline Amid Selling Pressure

The Indian stock market faced a significant decline on Friday, with heavy selling across various sectors leading to a loss of approximately Rs 5.5 lakh crore in investor wealth. Key factors contributing to this downturn include substantial selling by foreign institutional investors, weak global market signals, rising geopolitical tensions, and a slight depreciation of the Indian rupee. Analysts suggest that the market may continue to experience volatility, with technical indicators pointing towards a critical juncture that could determine future trends. Read on to discover more about the implications of these developments.

By Narendra Chaudhary Feb 27, 2026, 15:45 IST

Market Overview

On Friday, Indian stock markets experienced a notable downturn, marking the second consecutive day of losses. This decline was driven by substantial selling in sectors such as FMCG, automotive, real estate, and pharmaceuticals, which negatively impacted investor sentiment. The market saw a staggering loss of approximately Rs 5.5 lakh crore in investor wealth, bringing the total market capitalization of BSE-listed firms down to around Rs 463 lakh crore. The Sensex plummeted by over 1,000 points, settling near 81,159, while the Nifty 50 dropped more than 300 points, falling below the 25,200 mark. Key stocks that suffered losses included Sun Pharma, Mahindra & Mahindra, Bharti Airtel, and Bajaj Finserv. Although some IT stocks like Infosys and HCL Tech initially showed gains, they later reduced their advances, with TCS eventually slipping into negative territory.

Factors Contributing to Market Decline

1) Heavy Selling by Foreign Institutional Investors
Foreign institutional investors (FIIs) continued to sell off equities, which further dampened market sentiment. According to data from the NSE, FIIs sold Indian stocks worth approximately Rs 3,466 crore in the previous session. In contrast, domestic institutional investors remained active buyers, acquiring equities valued at around Rs 5,032 crore.

2) Weak Global Market Signals
Global markets did not provide much support, with the tech-heavy Nasdaq Composite closing lower as the recent rally in technology stocks lost momentum. Major US tech companies, including Nvidia, Alphabet, Amazon, and AMD, experienced declines, while only a few, such as Salesforce, reported gains following their earnings announcements. The Nasdaq ended the day down by more than 1%. In Asia, Japan's Nikkei saw a slight increase, while South Korea's Kospi fell, and Chinese markets exhibited mixed performance.

3) Rising Tensions Between the US and Iran
Geopolitical uncertainties also contributed to the market's decline. Indirect negotiations between the US and Iran regarding Tehran's nuclear program did not yield a resolution, raising concerns about potential escalation. Reports of increased US military presence in the region further heightened investor caution.

4) Weakness of the Indian Rupee
The Indian rupee experienced a slight depreciation against the US dollar due to strong demand for the dollar, which added additional pressure on the equity markets. The currency opened lower and remained under strain throughout the trading session.

Analysts predict that market volatility is likely to persist amid uncertain global conditions and ongoing foreign selling. Technical indicators suggest that the Nifty is currently trading within a consolidation range, and a significant breakout or breakdown could dictate the future trend. A breach below recent support levels may lead to further declines, while a move above resistance could indicate a pause in the current correction.