Indian stock markets extended losses on Thursday due to sustained foreign portfolio investor (FPI) selling and apprehensions about December quarter earnings. The day ended with benchmarks slipping over half a percent, dragged by heavyweights like Larsen & Toubro, Tata Motors, and HDFC Bank.

Market sentiment remains subdued, with no clear direction from domestic or global cues. TCS kicked off the Q3 earnings season, and investors now await more financial reports to gauge the market's trajectory. Traders are concerned as FPIs sold shares worth ₹7,170.87 crore on January 9, adding to the outflow of ₹3,362.18 crore reported the day before.

Further dampening sentiment, a private report predicted a continued decline in the rupee against the US dollar, fueled by expectations of an RBI rate cut next month. Meanwhile, India's nominal GDP growth for FY25 is projected to fall short of the 10.5% target for the second year in a row, with an advance estimate suggesting 9.7%. India Ratings also noted that corporate capital expenditure recovery remains uncertain for FY26 due to wavering domestic and external demand.

Adding to cautiousness, disappointing inflation data from China signaled ineffective stimulus measures, further pressuring global markets. In contrast, Commerce and Industry Minister Piyush Goyal highlighted opportunities for India to boost organic product exports to ₹20,000 crore over the next three years.

In regulatory updates, SEBI postponed the implementation of measures to curb excessive index derivative activity to February 10. Telecom stocks could react to reports of telcos resisting stringent QoS norms proposed by TRAI, urging a relaxation in data submission requirements.

Globally, Asian markets traded mixed on Friday following Japan’s household spending data. US markets were closed Thursday to honor former President Jimmy Carter.

On Thursday, the BSE Sensex dropped 528.28 points (0.68%) to close at 77,620.21, while the Nifty declined 162.45 points (0.69%) to 23,526.50. Investor sentiment was dampened by surging US Treasury yields and China’s weak inflation data, overshadowing optimistic export growth opportunities highlighted by APEDA.