Stories
Sensex, Nifty Plunge: FII Outflows Drive Market Decline, Longest Losing Streak in 25 Years
- •Indian benchmark indices Sensex and Nifty extended their decline, heading for their eighth consecutive weekly loss, the longest streak in 25 years.
- •Foreign Institutional Investors (FIIs) continued their selling spree, offloading over Rs 10,000 crore of Indian equities on September 30, contributing to a record $27.8 billion year-to-date selling.
- •The rupee weakened by 0.16% against the dollar, reaching 95.9850, as the dollar index hit a three-month high amid rising US Treasury yields.
- •The India VIX, a fear gauge, rose nearly 5% to 14.13, indicating increased market volatility and investor caution.
- •Sectoral declines were widespread, with the auto index falling 3% due to poor domestic sales from Bajaj Auto and Mahindra & Mahindra, while IT gained on slower US inflation data.
Key Questions Answered
The benchmark indices extended their decline primarily due to relentless foreign fund outflows from foreign institutional investors (FIIs), who offloaded heavy amounts of Indian equities amid elevated US Treasury yields, alongside a weakening Indian rupee and a surging volatility index.
Foreign institutional investors extended their selling streak to a fifth session on September 30, offloading massive amounts of Indian equities against the backdrop of rising US Treasury yields that reached 5.3 percent, pushing year-to-date FII selling to a record $27.8 billion.
While most Nifty sectoral indices declined—including the auto index dropping by 3 percent due to weaker domestic sales for companies like Bajaj Auto and Mahindra & Mahindra—the IT and financial services indices managed to gain, with the IT index rising 0.9 percent following a slower-than-expected rise in US inflation.
