Indian equities face longest weekly decline in 25 years amid global and domestic pressures

Indian stock markets enter a volatile week with their longest losing streak in 25 years, influenced by rising US bond yields, crude oil prices over $100, and domestic economic concerns.

Indian equities are heading into the week of 5 to 9 October under pressure after extending their losing run to eight straight weeks, the longest such decline in 25 years, according to the Goodreturns report. The Nifty 50 fell 3.1% over the week to 22,421.95, while the Sensex dropped 2.7% to 71,909.70, leaving sentiment fragile as investors weigh whether the recent slide has further to run. The market’s tone has been shaped by a familiar mix of external and domestic worries: stronger US bond yields, crude oil above $100 a barrel, renewed tensions in West Asia, a softer rupee and persistent foreign outflows.

Market strategists cited by LiveMint said the current decline is already among the sharpest in years, with some expecting more pain before a base forms later in October. The publication said US 10-year Treasury yields have moved above 5%, a level that tends to draw money towards dollar assets and away from riskier emerging markets such as India. That shift, combined with expensive oil and currency weakness, has left investors cautious even as some analysts continue to argue that India’s longer-term earnings and valuation backdrop remains healthier than the present mood suggests.

Foreign investor behaviour is likely to remain one of the most closely watched signals in the days ahead. Goodreturns reported that foreign institutional investors were net sellers for a seventh consecutive week, offloading equities worth ₹34,966 crore, while domestic institutions bought ₹33,455 crore and helped cushion the market. LiveMint noted that renewed foreign interest in Indian shares has proved uneven, with its durability dependent on whether global bond yields and crude prices stabilise. The balance between foreign selling and domestic buying may therefore determine whether the market can steady itself or faces another leg lower.

Domestic data are adding to the caution. Goodreturns said the southwest monsoon has registered a 13% shortfall, raising concern about farm output and the possibility of sticky food inflation. That comes at a time when investors are also monitoring September auto sales and the approaching quarterly earnings season for signs of whether corporate growth is slowing. A weaker agricultural outlook could keep pressure on consumer prices, while disappointing company results may deepen the market’s defensive mood.

From a technical perspective, the Nifty remains below its short- and long-term moving averages, signalling that sellers are still in control, according to Goodreturns. Support is seen around 22,250, with a break below that level potentially opening the way towards 22,000. On the upside, 22,700 is the key resistance zone, and any rebound into that area may meet fresh supply. The Bank Nifty is in a similar position, having fallen for a sixth consecutive week and remaining below important trend levels. Support is seen near 54,000, while resistance lies around 55,000 to 55,100.