Stories
Indian Equities Face Deepening Pain: FII Selling, Crude, Global Yields Fuel Market Woes
- •Indian equities recorded their eighth consecutive weekly loss, the longest streak in 25 years, driven by sustained FII selling, high US bond yields, and rising crude prices.
- •The Sensex and Nifty extended losses for a fourth straight session on October 1, with the Nifty falling 6.1% in September, its second-steepest monthly decline since October 2024.
- •Foreign Institutional Investors (FIIs) were net sellers, offloading ‘349.7 billion in the past week and ‘440.1 billion in September 2026 from Indian equities.
- •Domestic Institutional Investors (DIIs) provided strong support, emerging as net buyers with investments totaling ‘334.6 billion in the past week and ‘760.3 billion in September 2026.
- •Key risks include elevated US bond yields, firm Brent crude prices, FII outflows, uncertainty over a possible Iran peace deal, a depreciating rupee, and domestic inflation concerns.
Key Questions Answered
Indian equities posted their eighth straight weekly loss due to sustained foreign institutional investor (FII) selling, elevated US bond yields, and higher crude oil prices. Additional pressures included a depreciating rupee, inflation concerns, and uncertainty surrounding a potential Iran peace deal.
Foreign Institutional Investors pulled out a substantial Rs 440.1 billion from Indian equities during September 2026, bringing their total CY26 outflows to $28.3 billion. Conversely, Domestic Institutional Investors provided strong support by infusing Rs 760.3 billion during September and $67.8 billion overall for the year.
Motilal Oswal noted broad-based market weakness resulting in a 6.1% drop for the Nifty in September. Specific sectors that declined during the month included Technology, Financials Ex Banks, Automobiles, PSU Banks, and Capital Goods.
