- Nifty 50 ended its longest 8-week losing streak, closing 0.88% lower at 22,421.95
- Rising crude prices near $99 per barrel pressure India's inflation and trade deficit
- US Treasury yields hit 5.3%, tightening global finances and reducing emerging market appeal
The Indian stock market has ended its longest weekly losing streak in 25 years, with the Nifty 50 closing in the red for the eighth consecutive week as a combination of elevated crude oil prices, surging US bond yields, relentless foreign selling, rupee weakness and geopolitical uncertainty continues to weigh on investor sentiment.
The Nifty 50 settled 198.50 points, or 0.88%, lower at 22,421.95 on Thursday, while the Sensex declined 570.59 points, or 0.79%, to 71,909.70. The Bank Nifty ended at 54,450.75, down 182.30 points, or 0.33%.
The Nifty has now lost more than 8.5% over the past eight weeks and recorded its lowest weekly close since April 2025. The benchmark also ended in the red for the fourth consecutive trading session and has shed more than 1,200 points over the past six sessions.
The index briefly slipped into negative territory for fiscal 2027 during the selloff, although it recovered some ground later. It also touched its lowest level since April 2026.
The eight-week losing streak is the Nifty's longest since 2001, underscoring the unusual persistence of the current correction.
Here are six key factors driving the selloff:
1. Crude Oil Prices Remain Elevated
Rising crude oil prices have emerged as one of the biggest macro concerns for Indian markets. Brent crude was hovering around $99 a barrel during Thursday's session, keeping pressure on oil-importing economies such as India.
Higher crude prices can have implications for India's import bill, inflation, the rupee and corporate profit margins. The recent surge in oil has also added to concerns that inflationary pressures could remain elevated globally.
2. US Bond Yields Surge To Multi-Year Highs
A sharp rise in US Treasury yields has further tightened global financial conditions. The US 10-year Treasury yield climbed to around 5.3%, reaching its highest level since 2002, while the 30-year yield moved above 5.6%, also reaching levels last seen around 2002.
Higher US yields can make dollar-denominated assets more attractive relative to emerging-market equities and increase the cost of global borrowing. The move has therefore added another layer of pressure on Indian equities at a time when foreign investors are already reducing exposure.
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3. Heavy FII Selling
Foreign portfolio investor selling has been one of the most visible drags on Indian equities. FPIs sold Rs 10,148.41 crore of Indian equities on September 30, their biggest single-day outflow in nearly six months, according to provisional data. The latest selling took September's cumulative FII outflow to around Rs 44,013 crore, with foreign investors net sellers in 16 of 21 trading sessions during the month.
Domestic institutional investors have provided a significant counterweight. DIIs bought Rs 11,272 crore on September 30, according to the same data. However, the scale of foreign selling has continued to keep pressure on the market, particularly as global bond yields rise and risk appetite weakens.
4. Auto Stocks Come Under Pressure
The auto sector has been among the biggest casualties of the recent market selloff. The Nifty Auto index fell more than 3% during Thursday's session and emerged as the worst-performing sector of the week, with a decline of nearly 6%.
Bajaj Auto and Uno Minda have been among the weakest performers, with Bajaj Auto falling nearly 11% over the week and Uno Minda declining around 8.7%.
5. Geopolitical Uncertainty
Geopolitical tensions, including the ongoing US-Iran conflict, have added to uncertainty across global markets. The conflict has had implications for energy prices and global supply chains, with the oil market particularly sensitive to developments around the Middle East. The resulting volatility has coincided with rising inflation concerns and higher bond yields, creating a difficult backdrop for risk assets.
6. Rupee Weakness
The Indian rupee has also come under pressure as oil prices rise, the dollar strengthens and foreign portfolio investors continue to withdraw funds. The rupee traded around 95.99 against the US dollar, while sustained FPI outflows and firm US yields continued to weigh on the currency. The rupee subsequently slipped to around 96.32 on October 1, its weakest level in two months, according to Reuters.
A weaker rupee can further complicate the inflation outlook by increasing the domestic cost of imported commodities, particularly crude oil.
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