After brutal sell-off, will Dalal Street find its footing today?

After a sharp sell-off in the previous session, Indian equity markets are set to open cautiously on Friday, January 9, tracking mixed signals from Asian markets.

At around 8:20 am, Gift Nifty was trading at 26,001.5, up 31.5 points, or 0.12 per cent, from the previous close, indicating a tentative rebound after Thursday’s heavy fall.

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What happened on Thursday

On Thursday, benchmark indices witnessed a steep and broad-based sell-off, tracking weak global cues. The Sensex logged its sharpest single-day percentage decline in over four months, while the Nifty 50 slipped below the 25,900 level.
Heavy selling dragged the 30-share Sensex down 780 points, or 0.92 per cent, to close at 84,180.96. The Nifty fell 263 points, marking its biggest single-day decline since August 26, 2025.

The Nifty weakened for the fourth consecutive session and closed at a 14-day low. It also formed a third straight session of lower high and lower low, signalling continued weakness.

The index closed below its 50-day moving average for the first time in 68 sessions, ending at 25,876 against the 50 DMA of 25,970. On a closing basis, the next key support for Nifty is seen near 25,750, a level it has not breached since November 12, 2025.

Bank Nifty declined for the second straight day and also formed a lower high and lower low pattern for the third consecutive session. The 59,700–59,800 zone, which acted as a major resistance in December 2025, has now turned into an important support area.

The index closed near this support at 59,686, and traders are closely watching this zone for further cues.

The midcap index slipped below a crucial ‘make or break’ level. The midcap select index fell 2.1 per cent and hit a one-week low, forming a lower high and lower low structure.

It closed below its 50 DMA of 13,796 at 13,759. The index reversed from just 65 points below its previous life high of 14,118 made on December 1, 2024. It has failed to sustain above the 14,000 mark for five straight sessions. A decisive breakout is expected only if it holds above 14,125.

The smallcap index dropped 2 per cent, its sharpest fall since December 8, 2025. Despite the fall, the index has formed a higher high and higher low pattern, indicating rising volatility.

For the past 24 sessions, the smallcap index has remained range-bound between 17,700 and 18,100. Selling pressure has been visible near the 18,000 level for the last five days, making the 18,000–18,100 zone a key resistance. On Thursday, 23 out of 25 midcap select stocks and 89 out of 100 smallcap stocks ended lower.

The energy index slipped to a two-week low, while PSU banks, auto and metal stocks touched one-week lows. India VIX snapped its two-day decline and surged 6.5 per cent to close at 10.6.

During the session, India VIX hit a 19-day high of 10.99, indicating rising market volatility.

Foreign institutional investors reduced their index futures long positions to 8.70 per cent from 10.12 per cent. FIIs sold Rs 3,367 crore in the cash market for the fourth straight session.

Across cash, index futures and stock futures, FIIs recorded a net outflow of Rs 11,922 crore on Thursday. In contrast, domestic institutional investors continued their buying streak for a record 93rd session, purchasing shares worth Rs 3,701 crore.

Globally, the Dow Jones saw a recovery, but the Nasdaq snapped its three-day rally. The rupee broke its two-day gaining streak and closed 14 paise lower at 90.02 per dollar.

The dollar index strengthened for the third consecutive day and rose above 98.50, touching a one-month high. Gold slipped Rs 2,723 from its life high of Rs 1,40,465 hit on December 26, 2025, while silver remained Rs 16,400 below its record high.

Crude oil surged to a one-month high, rising 4.5 per cent to near USD 63, marking its biggest single-day gain since October 23. Base metals remained weak, with copper at a one-week low, while zinc fell 4 per cent and nickel declined 8 per cent over the past two days.