Indian Benchmarks Extend Losing Streak to Eighth Week as Nifty, Sensex Fall on FII Outflows, High Oil.
The market's prolonged decline shifts focus to the upcoming RBI policy review and the start of the Q2 corporate earnings season.
The story
Indian equities entered October on a downbeat note, extending their losing streak for an eighth consecutive week, the longest such run since 2001. On October 1, the Nifty 50 declined 0.88% to close at 22,421.95, while the Sensex dropped 0.79% to 71,909.70. [3, 5, 9, 14, 22, 24] Foreign Institutional Investors (FIIs) remained net sellers, offloading ₹9,484 crore, though Domestic Institutional Investors (DIIs) provided some support by buying ₹10,042 crore. [3, 14, 35, 38] The market faced pressure from several fronts: elevated crude oil prices, with Brent nearing $100 per barrel, rising US 10-year Treasury yields around 5.34%, and a weakening rupee. [3, 5, 15, 24] Auto stocks were among the biggest laggards, with Bajaj Auto falling significantly and Mahindra & Mahindra also declining after its September sales data. [9, 12, 21] In contrast, select IT stocks like Infosys, HCL Technologies, and Tata Consultancy Services showed relative resilience, posting gains during the session. [6, 9, 15] The Sensex briefly plunged over 1,000 points intraday before a late recovery trimmed losses. [15]
The tape
| Instrument | Last | Change |
|---|---|---|
| Nifty 50 | 22,421.95 | -198.50 (-0.88%) |
| Sensex | 71,909.70 | -570.59 (-0.79%) |
| Bank Nifty | 54,450.75 | -0.33% |
| India VIX | Above 14 | +6.5% |
Flows & data
| Item | Reading | Read |
|---|---|---|
| FII Net Flows | -₹9,484.22 crore (Oct 1) | Foreign investors continued to sell Indian equities. |
| DII Net Flows | +₹10,041.84 crore (Oct 1) | Domestic institutions provided buying support, offsetting FII outflows. |
| Tata Motors PV Sales | +15% YoY (September) | Passenger vehicle sales saw growth in September. |
| Karur Vysya Bank Total Business | +18% YoY (Q2FY27) | Bank reported strong business growth for the quarter. |
IPOs & the primary market
The primary market remained active, with several SME IPOs closing for subscription on October 1st. Vans Electroengineerings, a BSE SME IPO, closed its subscription on October 1st, having opened on September 29th. [2] Another NSE SME issue, Papadmalji Agro Foods, also closed on October 1st after opening on September 29th. [2] Among ongoing issues, Nityas Gems and Jewellery's mainboard IPO, open from September 30th to October 5th, saw a grey market premium (GMP) of ₹5, or 6.67%. [26, 33] Vishal Nirmiti's mainboard IPO, also open until October 5th, commanded a higher GMP of ₹35, representing 15.91% over its issue price. [26, 33]
Valuation watch — India & global
Following September's significant correction, which saw the Nifty fall over 6%, Indian market valuations have adjusted to more comfortable levels. [4, 10, 34] However, global factors continue to influence sentiment, with the US 10-year Treasury yield climbing to around 5.34% on October 1st, making safer US fixed-income assets more attractive to global investors. [3, 15, 24] This, coupled with Brent crude prices nearing $100 per barrel, sustains a "risk-off" sentiment, contributing to persistent foreign institutional selling. [15, 24, 25] India's near-term volatility, as measured by the India VIX, surged 6.5% on October 1st, reflecting increased market uncertainty. [5, 24]
What we'll be watching
- RBI Monetary Policy Committee meeting (October 5-7).
- Commencement of Q2 corporate earnings season.
- Market re-opening on Monday, October 5, after Gandhi Jayanti holiday.
- Tracking FII flows and global bond yields.
- Movement of crude oil prices.
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