Equity markets in India experienced a decline for the eighth consecutive week ending October 1, 2026. The NIFTY50 index dropped by 2.8%, while the SENSEX fell by 2.3%, reflecting investor caution amid foreign institutional investor (FII) outflows, rising US Treasury yields, and rebounding crude oil prices.
- NIFTY50 lost 641 points, closing at 22,421.95.
- SENSEX declined 1,670 points to 71,909.70.
- Foreign investors sold ₹9,484.22 crore in a single day.
- Volatility index (Nifty India VIX) increased by 13.9%.
- Key sectors like auto, capital markets, and metals saw significant losses.
- IT sector was the only major gainer, rising 0.3%.
Why Did the NIFTY50 and SENSEX Fall This Week?
The decline in the NIFTY50 and SENSEX was driven by multiple global and domestic factors. Foreign institutional investors continued to withdraw funds, selling capital market assets worth ₹9,484.22 crore in a single day. This selling pressure was influenced by elevated US Treasury yields, which reached a two-decade high of 5.344%, and a strong US dollar hitting a 16-month peak. These factors made investors cautious about riskier emerging markets like India.
Additionally, geopolitical tensions in West Asia, particularly between the United States and Iran, contributed to market uncertainty. The conflict has led to volatile energy prices, with Brent crude oil trading around $102 per barrel. Supply disruption fears increased after the US rejected a peace deal proposal, adding to investor concerns.
Which Stocks and Sectors Were Most Affected?
Among the top weekly losers on the NIFTY50 index were Bajaj Auto, Max Healthcare, Apollo Hospitals, ONGC, and Titan Co. Other significant laggards included Kotak Mahindra Bank, Axis Bank, Infosys, HDFC Life Insurance, and InterGlobe Aviation (IndiGo).
Sectors such as Nifty Auto, Capital Markets, Metal, FMCG, and Cement experienced declines ranging from 4.3% to 5%. Conversely, the Nifty IT sector was the only major index to gain, rising by 0.3%. This was partly due to positive momentum ahead of Accenture's earnings report and favorable US inflation data.
How Did Midcap and Smallcap Stocks Perform?
The Nifty Midcap 100 index declined by 3.7% during the week, with PB Fintech, Patanjali Foods, Swiggy, Fortis Healthcare, and LIC Housing Finance among the biggest losers. However, some midcap stocks like Coforge, Lenskart Solutions, Persistent Systems, LG Electronics India, and Mankind Pharma showed gains.
The Nifty Smallcap 100 index also fell by 3.2%. Stocks such as IFCI, Ola Electric Mobility, Gujarat Mineral Development Corp., Garden Reach Shipbuilders & Engineers, and Physicswallah were among the largest weekly losers. On the other hand, Cupid, Sterlite Technologies, HFCL, MTAR Technologies, and TD Power Systems were notable gainers in the smallcap segment.
What Is the Outlook for the Market?
Investors remain cautious due to ongoing geopolitical tensions and economic uncertainties. The market was closed on October 2 for Mahatma Gandhi Jayanti and will reopen on October 5, 2026. The focus will likely remain on developments regarding the US-Iran conflict, US Federal Reserve interest rate decisions, and domestic economic data.
Overall, the persistent selling by foreign investors and elevated global risks suggest that Indian equity markets may continue to face volatility in the near term. Domestic investors have provided some support, but the broader market sentiment remains subdued.
