I completely understand how phenyl group 'releases' or 'donates' electron through resonance, but how is that a phenyl group shows a weak -I effect, despite having electrons literally smeared on itself?

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Related: Why is phenyl weakly activating? – Oct 27 '15 at 00:52
2 Answers
As the $\mathrm{s}$ characteristic of an atom increases, so too does its electronegativity. Proof of this can be seen when comparing the $\mathrm{p}K_\mathrm{a}$'s of 2-carbon hydrocarbons. The $\mathrm{p}K_\mathrm{a}$'s of $\ce{CH3 -CH3}$, $\ce{CH2 =CH2}$, and $\ce{CH ≡CH}$ are $51$, $44$, and $25$ respectively.
When considering phenyl group for what it is, a ring of six $\mathrm{sp^2}$-hybridized carbons, it is easy to see why it shows a strong electron withdrawing effect, and a weak electron donating effect. The electronegativity of the carbons make benzene a nucleophilic structure that does not easily give up its electron cloud.

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in phenyl group the carbons are sp^2 hybridised which are having less s character and are thus electronegative in nature hence shows -I effect

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Hello! Good to see you attempt to write an answer, we appreciate contributions from you. However please try to be more elaborate. You need your answer to be useful for several users to see. I hope you fix your answer soon. – Pritt says Reinstate Monica Aug 01 '17 at 17:15