Indian equity markets remained under pressure during the trading week ended September 25, extending the recent period of weakness. The Nifty 50 closed the week at 23,140.50, down about 0.88 percent from the previous week's close, while the Sensex ended at 73,895.74, lower by approximately 0.53 percent. This marked the seventh consecutive weekly decline for both benchmark indices. September 26 was a Saturday and therefore there was no equity-market trading.
The week began on a relatively firm note, with the Nifty gaining on September 21 as easing crude prices and bargain buying provided some support. However, the recovery lacked durability. The market weakened on September 22 amid continued foreign selling and pressure on information technology stocks. A modest rebound followed on September 23, but the improvement was short-lived.
The major deterioration came on September 24, when the Nifty fell 1.64 percent in its sharpest single-session decline of the week. Rising crude oil prices, elevated US Treasury yields, geopolitical uncertainty and continued foreign portfolio outflows combined to trigger broad-based selling. The Sensex also came under heavy pressure. On September 25, domestic buying helped the market recover part of the previous day's losses, with the Nifty rising 0.34 percent. Nevertheless, the Friday recovery was insufficient to reverse the weekly decline.
"Indian equity markets remained volatile during the week, with the Nifty 50 extending its weekly losing streak to seven consecutive weeks, marking its longest such losing run in six years. The benchmark came under significant selling pressure on Thursday, when the Nifty declined 1.64%, before recovering modestly on Friday on the back of value buying. Despite the late-week recovery, the Nifty closed the week down around 0.88% from the previous Friday’s close," said R Ponmudi, chief executive officer, at the online trading and wealth-tech firm Enrich Money.
He added that crude oil remained one of the dominant macroeconomic headwinds. "Brent crude stayed above the $105-per-barrel mark for most of the week, while WTI crude also remained elevated above $90 per barrel amid continued geopolitical uncertainty and concerns over global oil supplies," Ponmudi said.
"Even though oil prices moderated toward the end of the week, providing some relief to global risk sentiment and helping Indian equities recover from their weekly lows, the decline in crude remains important for India, as it can ease pressure on the import bill, inflation expectations, the rupee and corporate input costs. In addition, the global bond market continued to add pressure, with the U.S. 10-year Treasury yield moving above 5.10% during the week. Elevated yields continue to tighten global financial conditions and can reduce the relative attractiveness of emerging-market assets. The combination of higher oil prices, elevated yields and geopolitical uncertainty contributed to the sharp sell-off seen during the middle of the week," says Ponmudi.
Foreign institutional investors remained significant sellers during the week. Their selling was substantial on several sessions, particularly on September 24 and September 25. Domestic institutional investors continued to provide a counterweight through strong purchases, helping limit the extent of the market decline. The divergence between foreign selling and domestic institutional buying has become an important feature of the current market environment.
According to two other market analysts, the sector performance was mixed during the week. "Information technology remained one of the weaker areas, with the Nifty IT index declining during the week as investors continued to assess demand conditions, earnings prospects and the implications of higher US interest rates. Banking and financial stocks also remained under pressure, with the Bank Nifty recording another weekly decline. Public-sector banks continued to face selling pressure as well," said one of the senior market analysits associated with a foreign brokerage.
In contrast, realty stocks performed relatively well and the Nifty Realty index registered a meaningful weekly gain after several weeks of weakness. Pharmaceutical stocks also displayed relative resilience, while FMCG and metal stocks recorded gains. Auto and consumer durable stocks were among the areas that supported Friday's recovery, said the other analyst, who is also with a foreign brokerage.
Currency and bond-market movements added to the complexity of the environment. The rupee remained under pressure from elevated crude prices and portfolio outflows, although intervention and other market forces helped contain excessive volatility. Indian government bond yields also remained relatively high, reflecting concerns surrounding liquidity conditions, inflation risks and the future path of monetary policy.
Overall, the week's market behaviour indicated that Indian equities are currently being driven more strongly by global macroeconomic and geopolitical factors than by domestic fundamentals alone. High crude prices, elevated US yields, foreign portfolio selling and currency pressure remain important sources of risk. At the same time, strong domestic institutional buying and selective strength in domestic-oriented sectors have provided some stability.
The week ended with the Nifty and Sensex still below their previous weekly closing levels, despite Friday's partial recovery. The persistence of the seven-week decline highlights the continuing cautious tone in the broader market, while the contrasting performance across sectors shows that the selling pressure is not uniform. Investors are likely to continue focusing closely on global macroeconomic developments and institutional flows as they assess the market's next phase.
Outlook
The immediate market environment therefore remains volatile. Developments in crude oil prices, global bond yields, the rupee, foreign institutional flows and geopolitical conditions are likely to remain important determinants of market direction in the coming week. Domestic earnings expectations, economic data and sector-specific developments will also influence investor sentiment.
"Technically, 23,000 is the immediate support for the Nifty. Failure to defend it could extend the decline toward 22,600–22,580, where the 200-week SMA is positioned; a break below this zone may expose 22,400. A short-term mean-reversion bounce is possible after the prolonged decline, but the structure remains sell-on-rise unless the index reclaims 23,500. The monthly RSI falling below 50 also indicates weakening medium-term momentum," said Hariselvan Radhakrishnan, founder & CEO of HST Wealth, a research analyst firm.
Bank Nifty is approaching its 100-week SMA near 55,175, while its monthly RSI continues to hold above 50. This relative momentum divergence could help cushion the Nifty and produce a relief bounce if Bank Nifty defends 55,175. A breakdown would weaken that possibility, while a recovery above 56,000 would provide the first sign of improving structure. Holding 23,000 with support from Bank Nifty, softer crude and easing bond yields could produce a tactical rebound. However, only a sustained Nifty move above 23,500 would weaken the sell-on-rise outlook, Radhakrishnan added.