India’s benchmark Nifty50 has recorded its longest losing streak in 25 years, extending declines into an eighth consecutive week as foreign selling, elevated global bond yields and geopolitical risks weigh on investor sentiment. The index is already down 15% from its all-time high of 26,373, touched in January this year. A 20% decline from the peak would mark a bear market.
The index has fallen over 3% this week, taking its decline over the past nine weeks to roughly 8.5%, or more than 2,000 points. The slide marks the longest run of weekly losses since 2001, when the Nifty declined for nine straight weeks. Historically, the index’s longest losing streak was 10 weeks in 1993, followed by a nine-week decline in 2001.
The latest fall comes after the Nifty ended September down 6.1%, its second consecutive monthly decline, amid persistent foreign outflows, elevated crude prices and concerns over rising global bond yields. Foreign investors have withdrawn over Rs 2.6 lakh crore from Indian equities in calendar 2026.
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The market’s breadth has also deteriorated sharply, with around 81% of Nifty 500 stocks trading below their 50-day simple moving averages, according to ICICI Securities. This points to broad-based weakness even as the benchmark approaches a major technical support zone.
“Over the last two years, Nifty has witnessed two major corrective phases (September 2024 and January 2026) where declines were arrested around the 80% Fibonacci retracement of the preceding rally,” ICICI Securities said.
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The ongoing correction is the third such instance, with the index once again testing the 80% retracement zone of its prevailing up move between 22,182 and 24,774. The zone coincides with the rising trendline and the 200-week exponential moving average around 22,400, creating what the brokerage described as a strong support confluence.
ICICI Securities said corrections lasting beyond six consecutive weeks have been relatively infrequent, with such extended declines eventually seeing momentum recover from bearish extremes. However, for a meaningful pullback to emerge, the Nifty needs to reclaim and close above 23,080, the previous week’s high. The index has failed to surpass that level for seven weeks.
The external environment remains challenging. The US 10-year Treasury yield has stayed around 5.3%, close to its highest level in more than two decades. The latest reading was around 5.298%, keeping global financial conditions tight and reducing the relative appeal of emerging-market equities.
Brent crude has eased below $100 a barrel to around $98.03, offering some relief after its recent surge. WTI was trading near $90. However, oil remains highly sensitive to developments around the Strait of Hormuz, and any setback in diplomatic efforts between the US and Iran could quickly restore the geopolitical risk premium.
Softer-than-expected August inflation and August headline PCE inflation of 3.4%, below the 3.7% market expectation, initially reduced expectations of an immediate Federal Reserve rate hike. Core PCE inflation stood at 3%. But resilient economic data and elevated Treasury yields have limited the broader risk-on response.
Diplomatic efforts between the US and Iran have gained some traction, with Tehran receiving Washington’s response to a proposed seven-day trust-building plan aimed at easing tensions and facilitating the reopening of the Strait of Hormuz. Differences over the sequencing of the proposed measures, however, remain unresolved.
Selling pressure from foreign investors has intensified. Foreign institutional investors (FIIs) sold Rs 45,536 crore worth of equities through exchanges in September, according to Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments. At the same time, they invested Rs 9,676 crore through the primary market.
“The sustained FII selling became intense during the last two trading days when the FIIs sold equity for a total of Rs 20128 crores,” Vijayakumar said. “With the US-10 year bond yield rising further to 5.3%, FIIs may continue to sell.”
He noted that foreign investors were simultaneously investing through the primary market and buying expensive mid- and small-cap stocks, describing the activity as an apparent contradiction.
“This appears to be a short-term phase in the market. Things will turn around when crude declines,” Vijayakumar said. “Investors can use this weak phase in the market to accumulate high-quality stocks, particularly large-caps in growth segments where the risk-reward ratio is favourable for investment.”
Mayur Patel, President and Fund Manager, Listed Equity, at 360 ONE Asset, said markets would remain sensitive to the resolution of the US-Iran conflict because of its direct impact on crude-linked inflation and global bond yields.
“On the domestic front, rate hikes now seem imminent given sharply higher global yields and rising inflation,” Patel said. He expects a modest 50 basis points of tightening over the next three to six months, rather than an aggressive tightening cycle.
Patel said underlying growth remained robust, with credit growth above 18% and industrial production holding firm. Festive-season demand could provide an early indication of consumption strength, although the emerging drought situation could weigh on rural incomes and offset any improvement in urban demand.
Technical outlook remains weak
“The near-term structure remains sideways to bearish, although continued holding above the long-term support area may provide a base for a recovery attempt,” said Hitesh Tailor, Technical Research Analyst at Choice Broking Private Limited.
He placed immediate support at 22,500-22,550 and resistance at 22,800-22,900. “Sustained trade above the resistance zone could improve sentiment, while a break below support may keep the pressure intact,” Tailor said.
For now, the Nifty’s record run of declines is testing whether the market is approaching capitulation or if high oil prices, elevated US yields, and relentless foreign selling will push the correction into a deeper bear market phase.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
