New Delhi: Benchmark equity indices Sensex and Nifty tumbled in early trade on Friday after a three-day rally, dragged by IT stocks and caution ahead of the Budget presentation on February 1.

Fresh foreign fund outflows and weak trends in global equities also added to markets' weakness during initial trading.

From the 30-Sensex firms, Tata Steel, HCL Tech, Infosys, Tata Consultancy Services, NTPC and Tech Mahindra were among the biggest laggards.

"As we near the Budget Day there are headwinds and tailwinds for the market. Geopolitical issues continue to plague global trade with continuous threats of tariff weaponisation by Trump. The spike in Brent crude to near USD 70 is a headwind for Indian macros in general and industries that use oil as inputs, in particular.

"However, these headwinds are likely to be countered by the positive message from the Economic Survey that projects GDP growth of 6.8 to 7.2 per cent growth in FY27," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

The steady decline in FPI outflows during the last two days indicate a possible change in FPI strategy, he added.

In Asian markets, South Korea's Kospi traded higher, while Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index quoted lower.

Foreign institutional investors offloaded equities worth Rs 393.97 crore on Thursday after a day's breather, according to exchange data. Domestic Institutional Investors (DIIs) however, bought stocks worth Rs 2,638.76 crore.

On Thursday, the Sensex climbed 221.69 points or 0.27 per cent to settle at 82,566.37. The Nifty edged higher by 76.15 points or 0.30 per cent to end at 25,418.90.

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