Nifty Hits 6-Month Low, Falls for 8th Straight Week as FII Selling Crosses ₹36,000 Crore in September

Indian equities remained under heavy selling pressure on Thursday, extending a prolonged corrective phase as domestic and global headwinds continued to weigh on sentiment. The Nifty 50 and Sensex both ended lower after a highly volatile session marked by a sharp afternoon decline followed by a partial recovery towards the close.

The Nifty opened at 22,543.70 and initially remained relatively stable around the 22,550–22,600 zone. It touched an intraday high of 22,610.60, but the tone changed sharply after noon as selling intensified across several heavyweight stocks and broader-market counters.

The index eventually slipped to an intraday low of 22,217.30, before recovering more than 200 points from the bottom during the final hour. Despite the rebound, the Nifty closed at 22,421.95, down 198.50 points or 0.88%.

The Sensex followed a similar trajectory, briefly falling to its lowest level in around 2 years and 4 months during the session before recovering some ground. It finally settled 570.58 points lower at 71,909.71, a decline of 0.79%.

Bank Nifty showed relative resilience compared with the headline indices and ended 0.33% lower. Meanwhile, volatility remained elevated, with the India VIX climbing around 6.5% and moving above the 14 mark, reflecting heightened uncertainty among market participants.

On a weekly basis, the Nifty 50 was down 3.11%, having touched a six-month low during the week. If the weekly decline is sustained, the index will complete eight consecutive weeks of losses, its longest such losing streak in 25 years.

What Is Driving the Market Lower?

Several factors are simultaneously putting pressure on Indian equities.

1. Crude oil remains elevated

Brent crude has remained near the $100 per barrel zone, while prices recently moved above $107 per barrel amid concerns over Middle East energy supplies. For India, which imports a large portion of its crude requirement, sustained high oil prices can worsen the import bill, add to inflationary pressure and affect margins for several industries.

2. Rising global bond yields

The US 10-year Treasury yield moved towards 5.3%, making fixed-income assets more attractive and reducing the relative appeal of riskier emerging-market equities. Higher yields also increase the cost of capital globally and can accelerate foreign portfolio outflows.

3. Persistent FII selling

Foreign institutional investors have continued to reduce exposure to Indian equities. After inflows during July and August, the trend reversed sharply in September, with foreign investors selling more than ₹36,000 crore during the month. Persistent overseas selling has remained one of the biggest drags on market sentiment.

4. Rupee weakness adds another layer of pressure

The rupee’s fall towards ₹96.1450 per dollar came as Brent crude moved above $107 per barrel amid concerns over potential supply disruptions in the Middle East. Higher oil prices, foreign equity outflows and pressure on Indian bonds have collectively increased worries over the current account, imported inflation and overall macroeconomic stability.

5. Interest-rate concerns remain elevated

Expectations of further monetary tightening by global central banks have also weakened risk appetite. With the US Federal Reserve already adopting a tighter stance and investors closely watching the upcoming RBI policy decision, concerns over higher interest rates remain an important overhang.

6. Heavy IPO and block-deal supply

Primary-market activity has remained strong, with nearly 100 mainboard IPOs raising around ₹1.13 lakh crore so far this year. Large block deals have also absorbed liquidity from the secondary market, creating an additional supply overhang at a time when foreign flows are already weak.

7. Weak monsoon concerns

Below-normal rainfall in parts of the country has raised concerns over agricultural output, rural consumption and food inflation. Any sustained weakness in farm output could affect rural demand and add further pressure to the inflation outlook.

Broader Markets Also End Lower

Selling was not restricted to benchmark stocks. The broader market remained weak as well, with the Nifty Midcap 100 declining 1.01% and the Nifty Smallcap 100 falling 0.97%.

The negative breadth highlighted the widespread nature of the sell-off and showed that risk aversion extended beyond large-cap stocks.

Nifty IT Outperforms, Auto Stocks Tumble

Sectorally, only one of the 11 major sectoral indices ended in positive territory.

The Nifty IT index gained 2.17%, supported by softer-than-expected US inflation data for August, which reduced expectations of an immediate rate hike and provided some support to technology stocks.

In contrast, Nifty Auto plunged 3.46%, emerging as the worst-performing sector of the day. Bajaj Auto fell 7.62%, while Mahindra & Mahindra declined 3.05%, with weaker domestic sales trends weighing on sentiment.

European Markets Trade Lower

Weak sentiment was also visible across European markets during the session. Germany’s DAX was trading 0.56% lower at 25,058.41, while the FTSE 100 declined 1.54% to 10,442.65. France’s CAC 40 fell 1.21% to 7,868.12.

The broad decline across major European indices pointed to continued caution among global investors amid rising yields, energy-price concerns and uncertainty over monetary policy.

US Index Futures Trade Mixed

US stock index futures, meanwhile, showed a mixed trend ahead of the Wall Street opening. Dow Jones futures were down 0.27% at 51,139, while S&P 500 futures edged 0.11% higher to 7,723.75 and Nasdaq 100 futures gained 0.38% to 30,816.25.

The mixed futures movement suggested that investors remained cautious rather than uniformly risk-off, with technology-linked indices showing relatively better strength.