Eighth Weekly Decline on the Cards
The Nifty 50, at 22,620.45 (-0.70%), is on track for an unprecedented eighth consecutive weekly loss, a streak not seen in roughly 25 years of index history. The Sensex closed at 72,480.29 (-0.40%), holding below the psychologically important 72,500-73,000 zone as expiry-day positioning adds volatility. Analysts cited in recent coverage say the index's ability to hold 22,600 today will determine whether bulls can finally arrest the slide, with today also marking quarter-end and the start of fresh earnings season disclosures alongside September auto sales data.;
FII Exodus Intensifies
Foreign institutional investors pulled out over Rs 26,000 crore from Indian equities in just three sessions, with September outflows hitting a six-month high of $2.7 billion, according to reporting on FPI flows. The selling has been attributed to elevated crude prices, surging US bond yields and a softer rupee, even as domestic institutional buying has partially cushioned the market. Despite this heavy selling pressure, Bank Nifty bucked the trend to close up 0.30% at 54,633.05, suggesting financials are seeing some differentiated demand even as broader indices bleed.;
Crude and Yields Keep Squeezing Sentiment
Brent crude remains elevated near 97.88, a level that continues to pressure India's import bill, current account and inflation outlook, per multiple reports this week. Simultaneously, 30-year US Treasury yields have surged to levels last seen in 2002, a global cue that has historically coincided with pressure on equity valuations as fixed income becomes more competitive. India's own government bonds ended the quarter at over two-year lows, with rate hike bets building after August inflation exceeded the RBI's medium-term target.;
Megacaps Hit Multi-Year Lows
Reliance Industries, Infosys, TCS, HUL and HDFC Bank have all touched multi-year lows, with ten Nifty 50 constituents posting double-digit percentage losses in September alone, according to recent data. This has created a visible divergence between large-caps under pressure and broader mid/small-cap indices that have held up comparatively better. Commentary around this divide has prompted some experts to question whether beaten-down blue-chips merit closer scrutiny, though this remains a matter of individual analysis rather than a signal to act.;
Index Reshuffle: BSE In, Wipro Out
BSE Ltd has entered the Nifty 50 index replacing Wipro, which moves to the Nifty Next 50, even as BSE shares fell nearly 4% on the rejig and an additional 3% after Goldman Sachs and BNP Paribas sold a combined 1.7% stake worth Rs 2,186 crore. Brokerage views on BSE diverge sharply, with Macquarie reportedly constructive on its growth trajectory while Bernstein and Nuvama flag caution over moderating earnings forecasts. The episode is a reminder that index-inclusion events can trigger mechanical flows independent of fundamental views.;
Policy and Capex Signals
The Union Cabinet cleared a Rs 2.79 lakh crore package including a Rabi MSP hike for six crops and Rs 1.86 lakh crore for the PM DHARA scheme, signaling continued fiscal support to rural and infrastructure channels. However, the Centre's fiscal deficit for April-August widened to Rs 7.1 lakh crore, or 41.9% of the FY27 target, driven by higher capex and subsidy outgo. Separately, India's formal manufacturing sector posted robust FY25 numbers, with gross value added rising 9.6% to Rs 26.9 lakh crore and invested capital up 11.1%, underscoring underlying industrial momentum even as markets correct.;
Rate Hike Chatter Builds
Bank of America Securities has revised its outlook to anticipate a cumulative 100 basis point rate increase by mid-2027, with the first hike potentially coming as soon as October's policy meeting. HSBC's chief India economist separately flagged two more possible RBI rate hikes this year given crude-driven inflation risks, even while describing exports as an emerging growth driver aided by a weaker rupee. This marks a notable shift in tone after a long period of rate-cut expectations, and bond markets have already begun pricing some of this uncertainty into yields.;
IPO Pipeline Stays Resilient
Despite the equity market correction, India's IPO market raised over $13 billion so far this year including a record $9 billion in the September quarter, with Inox Clean Energy filing a Rs 10,000 crore DRHP for what would be the largest private renewable energy IPO, and Coca-Cola reportedly considering a December filing for its India unit's roughly $1 billion listing. This divergence between a shaky secondary market and a buoyant primary market suggests underlying investor appetite for new-economy and growth stories remains intact. Reliance's Rs 13,000 crore bond issue, reportedly oversubscribed with SBI as the largest investor, further points to robust domestic debt demand even amid equity volatility.;