A sweeping wave of risk aversion has engulfed the market, triggering a sharp and broad-based sell-off that resulted in significant wealth erosion across nearly all segments. This downturn confirmed a decisive shift in investor sentiment, pushing frontline indices to their steepest weekly fall in **four months**. The main benchmarks failed to hold critical support levels. The S&P BSE Sensex shed over **760 points** to close near **81,537**, while the CNX Nifty lost more than **240 points**, settling just above the **25,000** mark. In a single recent session alone, the Nifty declined **1.38%**, highlighting the accelerating pace of the correction. *** Deep Erosion in Broader Markets While large-cap stocks showed relative resilience, the damage was overwhelmingly concentrated in the higher-beta segments of the market. The core theme of this downturn is the pronounced pain felt by small and mid-cap stocks, validating the earlier observations of systemic weakness. The broader indices posted alarming figures for the week, with the BSE SmallCap index plummeting a staggering **9%**. The BSE Midcap index followed closely, recording a sharp decline of **5.7%**. This erosion is far more severe than the headline indices suggest, emphasizing the extent of the flight to quality. The downturn has been brutal and widespread. Recent data indicates that nearly **80%** of the stocks within the Nifty Smallcap 250 index are now trading over **20%** lower from their recent peaks. Moreover, over **600 small-cap stocks** have already registered double-digit losses since the beginning of the year. This aggressive de-rating follows a period of rapid outperformance, signaling an inevitable valuation reset. *** Sectoral Indices Register Universal Declines The sell-off proved comprehensive, with all sectoral indices finishing in negative territory. The clear risk-off environment impacted segments sensitive to economic cycles and high valuations the hardest. The **Nifty Realty** index bore the brunt of the weekly pressure, collapsing by more than **11%**. This significant drop reflects heightened caution regarding leveraged sectors and high-growth bets. The **Nifty Consumer Durables** sector also faced heavy selling, declining **6.5%**. Other key sectors saw substantial cuts: **Nifty Media** dropped around **4%**, while the Oil & Gas, Energy, Infra, Defence, and Healthcare sectors all registered losses of approximately **3%** or more. Even the relatively stable Nifty Bank index saw pressure, declining nearly **1%** in one session, confirming the lack of safe havens in the current environment. *** Macroeconomic Pressures Intensify Selling The systemic weakness is underpinned by a confluence of macroeconomic factors and shifts in capital flows. A primary driver has been the aggressive stance of Foreign Institutional Investors (FIIs), who turned net sellers, offloading equities worth approximately **₹14,651 crore** during the week. While Domestic Institutional Investors (DIIs) attempted to cushion the blow with strong buying, their support was insufficient to neutralize the foreign exodus. Compounding the pressure, the Indian rupee has continued its downward trajectory against the US dollar, breaching the psychologically significant **92** mark and hitting record lows. A rapidly weakening currency typically fuels FII selling and raises concerns about imported inflation. Furthermore, specific corporate developments and ongoing valuation concerns contributed to the fragile sentiment. Select heavyweight stocks, particularly those facing renewed regulatory scrutiny, saw dramatic single-day declines exceeding **10%**. This highlighted how pockets of fear can rapidly transmit instability across the entire market structure. The current phase demands intense selectivity as the market corrects the over-exuberance witnessed in prior years.