The Nifty 50 has ended its longest 8-week losing streak in 25 years, closing 3.1% lower at 22,421.95 on Thursday after a fourth consecutive trading session in the red. According to Zee News, the Sensex declined 2.7% to 71,909.7 compared with 73,895.7 a week earlier, with the current selloff surpassing the seven-week decline witnessed during the initial days of Covid-induced shutdowns six years ago. The benchmarks witnessed selling pressure throughout the week, with the Nifty losing 3.1% and the Sensex shedding nearly 2,000 points. The index has now lost more than 9% over the past eight weeks and recorded its lowest weekly close since April 2025, with the benchmark also shedding more than 1,200 points over the past six sessions. The Nifty has briefly slipped into negative territory for fiscal 2027 during the selloff, although it recovered some ground later. The sharp fall midway had wiped out around ₹9 lakh crore in investor wealth in about an hour, while the India VIX index climbed 7% to an over three-month high, indicating heightened market volatility. As per CNBC TV18, in the 42 trading sessions since the index's high of 24,774 during the inaugural Closing Auction Session, the index has lost nearly 2,500 points and gained only in 15 of those sessions.
The current correction is driven by an unprecedented surge in US 10-year bond yields, the key reference frame for global asset pricing, which broke past its 2007 peak to 5.3%, the highest since April 2002, with the 30-year at 5.6%. As per The Economic Times, the US 10-year Treasury yield has surged to multi-year highs, creating widespread pressure across global markets. Foreign portfolio investors were net sellers of equities worth ₹44,012.82 crore during the week, the highest since June 2026, while domestic institutional investors were net buyers to the tune of ₹10,041.84 crore. Foreign investors continued to dump Indian equities amidst rising crude oil prices, negatively impacting the rupee's value, with the rupee losing half a percentage point and being the worst performer in the continent. Foreign institutional investors (FIIs) have dumped shares worth around $1.1 billion on Wednesday, taking cumulative sales during the month to around $3.8 billion. Geopolitical uncertainty, including the ongoing US-Iran conflict, has added to market volatility, with US President Donald Trump saying the US will either "make a deal" or resolve the situation by "maybe by blowing them up", doing little for hopes of a ceasefire held by market participants.
Automobile stocks were among the worst performers during the day and were a key factor for the sharp fall of the benchmark indices midway as auto sales for September failed to meet market expectations. Bajaj Auto fell 7.6%, while Maruti Suzuki declined 4.9% to fall to a 52-week low. The Auto index fell 5.85% during the week, with the Nifty Auto plunging more than 2% to be the top loser among the sectors. Nifty Auto and Nifty Metal were the worst-performing sectoral indices, slumping 3.46% and 2.35% respectively, following September sales data for the automotive industry that showed a flattening of growth compared with August. Mahindra & Mahindra's sport utility vehicle sales were down 14%, compared with the 50% rise the company recorded in August. Bajaj Auto reported a 12% fall in sales, while tractor sales at Escorts were down. The situation has worsened because of rising Brent crude prices, as well as the possibility that interest rates could rise, affecting vehicle financing. Selling was broad-based across sectors, with the BSE Consumer index declining 6.15% and the Auto index falling 5.85% during the week. Metals, FMCG, realty and power stocks also witnessed pressure, indicating broad-based weakness across market segments.
Broader markets also declined significantly with midcap and smallcap indices falling 3.5% and 3.3% respectively, as reported by Zee News. Sector-wise, BSE IT index was the only gainer, rising 0.2% over the week, while auto sector was the worst-performing, falling 5.5% followed by consumer durables, down 5.3%. FMCG and metal indices declined 4.2% each, while energy, healthcare and realty indices fell between 3.3% and 3.6%. Banking, capital goods and power indices declined 2.4%, 2.4% and 2.6% respectively. For September, the Nifty 50 and Sensex dropped 6% and 5.82% respectively, marking one of the worst months for domestic equities since the March crash. The broader market also remained under pressure, with the Nifty Midcap index falling 1.1% and the Smallcap index losing nearly 1%, indicating widespread selling across market segments. Market breadth remained weak with 1,870 stocks declining against 1,380 advancing stocks on the NSE, as reported by Moneycontrol. The selling was broad-based, with 15 of the 16 major sectors ending the week lower.
Analysts are of the view that elevated crude prices, bond yields and global liquidity remain key risks, though continued weakness could increasingly create selective stock-specific opportunities as positioning and valuations reset. According to The Economic Times, on the technical front, the short-term market outlook remains weak, though conditions are oversold. On the downside, 22,200/71,300 is a key support zone, while 22,500/72,200 is immediate resistance. A move above 22,500/72,200 could extend the pullback to 22,700-22,800/73,000-73,200, while a break below 22,200/71,300 could intensify selling pressure and take the market down to 22,000-21,950/71,000-70,700. For Bank Nifty, 54,000 is a crucial support zone, with the index potentially rebounding to 55,000-55,500 if it holds above this level. The biggest drags on the Nifty included Bajaj Auto, Maruti Suzuki, M&M, Adani Enterprises and Adani Ports, while HDFC Life, SBI Life Insurance, HDFC Bank, Infosys and TCS emerged among the key gainers. At the sectoral level, the IT index advanced 2%, while telecom rose 0.5%, though Auto, Media, FMCG, Infra, Metal, Consumer Durables and Realty indices declined 2-3%. According to market experts, investor sentiment remained weak due to persistent geopolitical tensions, elevated crude prices, foreign fund selling and concerns over monetary policy.
