The Nifty's 8.74% fall over eight weeks is far milder than the roughly 22% drop seen in a comparable phase in 2008 or the 33% slide in 2020.
MUMBAI: Indian equities closed an eighth consecutive week of losses on Thursday, 1 October 2026, the longest weekly losing streak since 2001. The BSE Sensex fell 570.59 points, or 0.79%, to 71,909.70, while the NSE Nifty 50 dropped 198.50 points, or 0.88%, to 22,421.95. Markets were shut on Friday for Gandhi Jayanti, so traders now head into the long weekend with the RBI’s policy decision days away.
A rare run
Over the eight weeks, the Nifty has lost 8.74% and the Sensex 8.40%. According to exchange records, only the nine-week fall of 2001 has lasted longer since 1992. On Thursday, the Nifty touched an intraday low of 22,217.30, close to its April low of 22,180, a level traders watch as support.
Selling was broad. Declining stocks outnumbered advancing ones by 2,916 to 1,306 on the BSE, and the India VIX volatility gauge rose 13.9% over the week. Notably, auto stocks fell about 3% on the day after soft September sales, while realty, media and metals also slipped. The IT index, by contrast, gained as a weaker rupee lifted export earnings expectations.
The pull of a 5.30% Treasury
The main trigger sits outside India. The US 10-year Treasury yield has climbed to about 5.30%, a multi-decade high. Consequently, a near risk-free dollar return now competes directly with emerging market equities, and global funds have shifted money into US debt.
Energy adds to the strain. Brent crude has reclaimed $100 a barrel after touching $107.82 amid US-Iran tensions and concerns over the Strait of Hormuz. For India, which imports over 85% of its crude, that widens the trade gap and lifts costs across the economy. Estimates cited in Finance Ministry reviews suggest the current account deficit could reach 1.9% to 2.2% of GDP if Brent averages $100 through FY27. Additionally, central bank estimates indicate every 10% rise in crude adds about 20 basis points to CPI inflation.
Oil, the rupee and bonds
These pressures meet in the currency market. The rupee weakened to a two-month low near 96.32 per dollar, with dealers reporting that state-run banks sold dollars on the RBI’s behalf to curb sharp swings. Meanwhile, the 10-year government bond yield rose 4 basis points to 7.20%, as outflows spread into debt. Each channel feeds the next: a weaker rupee cuts foreign investors’ dollar returns, encouraging further exits.
Who is selling and who is buying
Foreign portfolio investors sold ₹44,012.82 crore of shares in the week, the most since June, including ₹10,148 crore on 30 September alone. Their calendar-year outflows have reached a record $27.8 billion.
Domestic institutions, however, have absorbed much of that supply. Backed by steady SIP flows, mutual funds, insurers and pension funds bought ₹33,455 crore during the week. Their net purchases for 2026 have crossed ₹6,06,640 crore. As a result, a fall that might once have turned disorderly has stayed relatively orderly.
A market of two halves
The primary market tells a strikingly different story. Mainboard IPOs raised about ₹94,205 crore in the first half of FY27, a record, while total public equity fundraising reached ₹2.43 lakh crore. Foreign investors have joined anchor books where pricing looked attractive, even while selling listed shares. Meanwhile, domestic money flowing into new issues has left less cash to cushion the secondary market.
The RBI’s October call
The Monetary Policy Committee meets from 5 to 7 October. Money markets are pricing two paths: a pre-emptive 25 basis point hike to defend the rupee and anchor imported inflation, or a hawkish pause backed by continued dollar sales and liquidity steps. Either way, the committee must weigh external stability against growth heading into the festive quarter.
Correction, not collapse
Context matters here. The Nifty’s 8.74% drop is far milder than the roughly 22% fall during a comparable phase in 2008 or the 33% plunge in 2020. Corporate balance sheets, bank capital and tax collections remain sound. Instead, the slide reflects a global repricing that caught Indian equities at premium valuations. Historically, markets have recovered after prolonged weekly losing streaks, although the end of a streak does not by itself mark the end of a consolidation phase.
What to watch
When markets reopen on 5 October, several signals will matter. A US 10-year yield above 5.35% or Brent sustained above $105 would add pressure. On the domestic side, the rupee holding near 96.50, the Nifty holding its April low and the pace of SIP-backed buying will show whether the domestic cushion stays firm. Above all, the MPC statement on 7 October will set the tone for the weeks ahead.
For now, the eight-week slide is a test of Indian markets’ new shock absorbers. Encouragingly, domestic savers have so far absorbed most of the selling that once would have sent indices into freefall.
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