The Nifty 50 dropped 0.51% to 25,913.45 points, and the BSE Sensex declined 0.46% to 84,875.85 as of 9:30 a.m. IST. The rupee extended its slide to 90.56 per dollar, reflecting continued pressure on the currency.
All 16 major sectors traded in negative territory, with small-cap and mid-cap indices down 0.2% and 0.5%, respectively.
“A major drag on the market continues to be the elusive U.S.-India trade deal, which is impacting India’s exports to the U.S., widening the trade deficit, and contributing to the continuous depreciation of the rupee,” said VK Vijayakumar, chief investment strategist at Geojit Investments.
Earlier this year, the U.S. imposed steep tariffs on Indian goods, partly in response to India’s purchases of Russian oil. India’s chief economic advisor recently indicated that a trade agreement is unlikely before March 2026.
Foreign investors continued their selling streak, offloading shares worth 11.1 billion rupees ($122.6 million) on Friday, marking their sixth consecutive session of outflows. Total foreign outflows in December have now reached approximately $2 billion. Financial stocks, which carry higher foreign exposure, led the losses, falling 0.5% and dragging down the Nifty.
Among individual stocks, Oil and Natural Gas Corp (ONGC) slipped 3%, emerging as the top Nifty loser. Axis Capital initiated coverage on ONGC with a “sell” rating, citing declining oil production and a muted outlook for global oil prices.
On the upside, KEC International jumped 3.5% after securing orders worth 11.5 billion rupees ($126.9 million) in its transmission and distribution and civil business segments, offering some relief to investors.
The market’s early weakness underscores investor caution as India navigates currency volatility, trade tensions, and foreign capital flows ahead of the new year.