Sensex Falls 400 Points as Auto, Bank Stocks Face Selling Pressure

Market sentiment weakens amid broader Asian selloff; FII outflows continue

Indian equity markets slipped into the red on Friday, with the Sensex declining 400 points to trade at 77,450 while the Nifty fell 130 points to settle around 24,200. The half-a-percent decline reflected broader weakness sweeping across Asian bourses, even as selective buying in pharma and IT counters provided some respite.

Selling Spree in Auto and Banking

The downturn was largely driven by heavy selling in auto and banking stocks, sectors that have traditionally anchored market movements. Analysts attributed the weakness to profit-taking after recent gains and concerns over global interest rate trajectories. Meanwhile, pharmaceutical and IT shares managed to attract investor interest, suggesting a defensive shift in market positioning.

The decline came as no surprise, given overnight weakness in American markets. The S&P 500 fell 0.38 percent, the Dow Jones lost 0.63 percent, and the Nasdaq slipped 0.13 percent on Thursday evening. Across Asia, the story was similar – South Korea's Kospi fell 1.05 percent, Japan's Nikkei dropped 1.05 percent, and Hong Kong's Hang Seng declined 1.24 percent.

Foreign Investors Turn Sellers

Underlying the market weakness was continued outflow pressure from foreign investors. On Thursday, FIIs sold shares worth ₹341 crore, continuing a pattern of net selling that has accumulated to ₹39,164 crore over the past month. In contrast, domestic institutional investors remained net buyers, purchasing ₹441 crore worth of shares on the day and ₹31,092 crore over the last 30 days.

Yesterday's Close Still Negative

Friday's decline built on Thursday's weakness, when the Sensex had lost 114 points to close at 77,845 and the Nifty slipped 4 points to 24,327. That day had seen strength in auto and realty stocks offset by weakness in FMCG, suggesting volatility across sectors.

What's Next

Market participants remain cautious as global cues continue to dominate local sentiment. Analysts expect support levels around 24,100 on the Nifty and 77,200 on the Sensex in the near term. However, the persistence of FPI selling and soft global growth signals suggest further downside risks unless sentiment shifts.

Traders are now eyeing inflation data and commentary from central banks globally for fresh directional cues. Domestic earnings season will also be critical in determining whether current valuations hold or face further compression.