Benchmark indices Nifty and Sensex started off the session on January 16 on a weak footing, snapping a three-day winning streak amid weak global cues. While investor sentiment got a boost in recent sessions after cooler-than-expected US inflation figures for December, the uptrend in global markets eventually gave way to profit booking. Adding to that, a slew of high-profile quarterly earnings also impacted trade in the domestic market.

While sharp losses in banking and information technology stocks dragged the two benchmarks into the red, gains in index heavyweight Reliance Industries arrested the fall to some extent.

At 10.03 am, the Sensex was down 363.79 points or 0.47 percent at 76,679.03, and the Nifty was down 90.15 points or 0.39 percent at 23,221.65. About 1,830 shares rose, 1,240 fell, and 119 remained unchanged.

While most experts were anticipating a relief rally for the domestic market following a horrid start to 2025, it was unlikely to move the needle when it came to the underlying market sentiment. Persisting concerns over an earnings growth slowdown, also up for debate in the ongoing Q3 earnings season have prompted investors to stick to a 'sell-on-rise' strategy.

In addition to that, the continuous exodus of foreign institutional investors has further made the market fragile, so much so, that even a declining dollar index and US bond yields are not adequate to arrest the sustained selling by FIIs, believes VK Vijayakumar of Geojit Financial Services. "Therefore, any significant recovery in the market will be sold into," he said.

The market continues to be trapped in oversold territory with unchanged fundamentals and multiple lingering concerns that leave little room to stage a significant turnaround. January’s seasonal weakness is also becoming evident, with the Nifty down about 2 percent so far this month. The slump is triggered by multiple headwinds, including uncertainty over the upcoming budget, Trump’s policy moves, the Fed’s rate cut trajectory, slowing earnings growth, and stretched valuations.

As for today's trade, shares of Infosys tanked over 5 percent, emerging as the worst hit on the Nifty 50. While the information technology major's October-December earnings came in ahead of market estimates, its revised revenue growth guidance, hinting towards a weaker Q4 may have triggered the fall.

Joining Infosys in its downslide was Axis Bank with its near 5 percent plunge sparked by its sluggish Q3 numbers. Axis Bank saw higher slippages and lagging deposit growth in Q3, pushing brokerages to slash their target prices on the bank's stock. Looking ahead, the management anticipates both deposit and credit growth to remain subdued until FY26, as the broader economic environment looks tough.

However, shares of oil-to-telecom conglomerate Reliance Industries surged nearly 3 percent, easing some pressure on the two benchmarks. The surge in the shares of RIL was fuelled by the company's better-than-expected Q3 numbers and hopes of better times after six months of sluggishness.

As for the broader market, which houses mid-smallcap indices, trends remained weak, with a fall of 0.2 percent and 0.3 percent, respectively. positive trends with gains of 1.6 and 1.5 percent.

Sectoral indices also painted a mixed picture today, with Nifty IT emerging as the worst-hit sector, slipping over 2 percent amid sharp cuts in names like Infosys, TCS, Wipro, and HCLTech. The broader Nifty Bank index followed suit, falling over 1 percent as Axis Bank, ICICI Bank, and Kotak Mahindra Bank stood firmly in the red.

However, other sectors like Nifty Energy, Nifty Metals, and Nifty Infra rose nearly 1 percent each, enjoying the benefits of an easing in the dollar index.

"The next seven days represent an important time window, but bulls will need to get past the immediate hurdle at 23,471 to trigger an upside. Any failure to do that and ideally take out 23,820 on a daily close-basis over the next few sessions will mean that the rebound was merely the result of short-covering rather than big-money accumulation," Akshay Chinchalkar, Head of Research, Axis Securities said.

Reliance Industries, Hindalco, BPCL, and Coal India were the major gainers on the Nifty whereas Infosys, Axis Bank, TCS, HCLTech and Wipro were the major laggards.