extended losses for the third consecutive session on Wednesday as the rupee weakened to a record low of 91.70 against the US dollar, compounding investor concerns amid sustained foreign institutional selling and heightened global uncertainties.
The closed at 81,909.63, down 270.84 points or 0.33 per cent, while the fell 75 points or 0.30 per cent to settle at 25,157.50, recovering over 237 points from its intraday low of 24,920.
The currency depreciation emerged as a key concern for market participants.
“USD/INR has surged to record highs near 91.70, driven by a combination of sustained FPI outflows, adverse global risk sentiment stemming from geopolitics and U.S.–India trade frictions, and a slowdown in exporter dollar conversions even as importer hedging demand remains strong,” said Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities.
“In the near term, USD/INR could extend towards 92–92.50 levels. Key catalysts to watch are progress on the India-EU FTA and signals from the Union Budget on Feb 1.”
Foreign institutional investors continued their selling spree, offloading equities worth approximately ₹2,938 crore on Tuesday, adding to the mounting pressure on domestic bourses.
Market breadth remained heavily skewed towards decliners, with 2,968 stocks falling against 1,317 advances on the BSE, where 4,405 stocks were traded. Notably, 916 stocks hit 52-week lows compared to just 59 touching 52-week highs, while six stocks were locked in lower circuit.
Broader markets witnessed sharper declines, with the Nifty Midcap 100 falling 661.70 points or 1.14 per cent to close at 57,423.65, and the Nifty Smallcap 100 declining 149.85 points or 0.90 per cent to 16,551.20. The Nifty Next 50 dropped 246.45 points or 0.37 per cent to 66,864.45.
Banking and financial stocks bore the brunt of selling pressure.
The Nifty Bank plunged 603.90 points or 1.02 per cent to 58,800.30, while the Nifty Financial Services declined 237.10 points or 0.87 per cent to 26,963.50.
Among major losers, ICICI Bank fell over 2 per cent, while Trent also declined more than 2 per cent. “Bank Nifty, which had been comfortably holding above its upward-sloping trendline on the daily chart, eventually gave way and closed below it, ending the session at 58,800, down 1.02 per cent,” said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.
Sectoral performance remained largely negative, with Consumer Durables falling 1.6 per cent, extending losses for the ninth consecutive session. PSU stocks declined 1 per cent, while Realty dropped 1.6 per cent.
However, Nifty Metal bucked the trend with a gain of 0.6 per cent, and Nifty Oil & Gas added 0.3 per cent. Among individual gainers, Eicher Motors and IndiGo emerged as top performers in the Nifty pack.
Gold prices surged dramatically amid safe-haven demand. “Gold traded exceptionally strong, surging by nearly ₹7,000 to ₹1,57,500, extending its sharp rally with prices gaining over ₹15,000 in just three sessions and already up nearly 15 per cent in January 2026,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities.
“Escalating geopolitical tensions across multiple fronts — involving the US, Greenland, Europe, Russia–Ukraine — have intensified the rush toward safe-haven assets.”
“Markets remained under pressure for yet another session and ended lower amid weak cues. The persistent weakness was driven by ongoing global trade and geopolitical concerns, including renewed tariff-related fears that weighed on risk assets ahead of the US President’s speech at Davos,” said Ajit Mishra, SVP Research at Religare Broking Ltd.
Looking ahead, markets will remain watchful as US President Trump heads to Davos after recent tensions with European allies over Greenland. Stock-specific action is expected around quarterly results from InterGlobe Aviation, DLF, Indian Bank, Coforge, APL Apollo Tubes, Mphasis and Radico Khaitan.
“We expect the Nifty to trade sideways, tracking ongoing earnings and awaiting global cues post Trump speech at Davos,” said Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services Ltd.