Indian equity benchmarks extended their decline for a third consecutive trading session on Wednesday, with the BSE Sensex declining 49 points, or 0.7%, to settle at 72,480.07, while the NSE Nifty50 fell 96 points, or 0.42%, to 22,620.45. Over the three-session losing streak, the Sensex has declined 1.92% and the Nifty 2.25%. The market's weakness came despite some buying in banking and realty stocks, with private-sector lenders providing support to contain the broader decline. Healthcare and metal stocks remained under pressure, with the Nifty Pharma index falling 1.84%, while the BSE 150 MidCap index slipped 0.17% and the BSE 250 SmallCap index ended unchanged. According to exchange data, foreign institutional investors sold equities worth ₹9,980.22 crore on Wednesday, following an outflow of ₹5,353.22 crore in the previous session, as reported by Reuters.
The opening was mixed across sectors with Nifty IT leading gains at 1.22%, while Private Bank gained 0.83% and MidSmall IT & Telecom rose 0.42%. However, Nifty Auto was the biggest sectoral drag, falling 2.90%, reflecting ongoing concerns about supply disruptions. Realty declined 1.51%, Media fell 1.45%, Metal dropped 1.10% and Pharma declined 0.88%. Among Sensex stocks, Kotak Mahindra Bank rose 2.73%, Infosys gained 1.63%, HCLTech advanced 1.49%, TCS rose 1.24% and HDFC Bank gained 0.68%. On the downside, M&M fell 2.91%, BEL dropped 1.72%, Eternal fell 1.64% and Titan declined 2.04%. The broader market also remained under pressure with Nifty Midcap 50 falling 0.76%, Midcap 100 declining 0.69% and Smallcap 100 dropping 1.06%.
Brent crude for November 2026 delivery rose $1.24, or 1.21%, to $103.83 a barrel in the domestic market data, with Brent remaining above the $100-a-barrel level amid continuing uncertainty surrounding Middle East supply and shipping routes. Rising crude oil prices also weighed on sentiment, with investors concerned about the impact of higher import costs on India's inflation, trade deficit and corporate profitability. The global bond market has added another layer of uncertainty, with the US 10-year Treasury yield climbing above 5.2%, while the 30-year yield moved to levels not seen in more than two decades. On Wednesday, the US 10-year Treasury yield eased 0.61% to 5.228%, while the US Dollar Index slipped 0.19% to 101.20.
Foreign investors withdrew about $2.7 billion from Indian equities during September, taking their total equity outflows for the year to about $26.8 billion, according to Reuters. Higher US interest rates, geopolitical tensions and elevated oil prices have contributed to the cautious stance among overseas investors. The India VIX rose 0.61% to 13.50, signalling higher volatility as markets navigate the ongoing foreign selling pressure. The NSE's India VIX, a measure of expected near-term volatility, rose 0.61% to 13.50, indicating relatively better resilience in the broader market compared to previous sessions. Market experts suggest that the market's direction will remain closely linked to crude prices, geopolitical developments and FII flows, as noted by Vikram Kasat, Chief Business Officer – Advisory and Dealing at PL Capital.
Despite the pressure on equities, domestic economic data provided some support to investor sentiment. India's industrial production grew 8% in August, accelerating from 7.4% in July, supported by stronger manufacturing activity, as reported by Reuters. The session also marked a major change in the Nifty50 index, with BSE Ltd being added to the benchmark index, replacing Wipro as part of the NSE's periodic index reshuffle. Investors should focus on companies with earnings visibility and strong balance sheets and consider a staggered approach amid continued market volatility, according to market experts.
