The Indian stock market seems to be at sea at the moment. The benchmark indices crashed through the week, with the Sensex logging its longest weekly losing streak in 25 years and the Nifty50 marking its third-longest technical correction in October. Rising inflation, crude oil surging past $114 a barrel, persistent foreign capital outflows, hardening global bond yields, a strengthening US dollar and a higher interest rate trajectory are fuelling the intense market selloff. So far in 2026, the Sensex and the Nifty have lost about 15 percent and 14 percent, respectively, making it one of the worst-performing major equity markets this year despite India’s resilient economic fundamentals. Renewed price pressures, thinning corporate margins and muted festive demand are expected to further boost risk-averse sentiments in the coming weeks.
The consoling news is that India isn’t alone in this gloom and global markets, including all Asian economies, are suffering a similar fate. China just entered a technical bear market after falling 20 percent from its June peak, marking 10 consecutive weeks of losses as concerns over technology valuations, domestic consumption slowdown and lack of government support are triggering a correction. Chinese stocks lost a staggering $2.4 trillion in market value with the sell-off spreading to Hong Kong-listed Chinese equities and other Asian markets. Indonesia, too, witnessed its worst two-day crash since the 1998 Asian financial crisis, with global index provider MSCI considering downgrading it to a ‘standalone’ status from ‘emerging market’ and causing a bloodbath that wiped out $65 billion in one session. Then there’s South Korea’s benchmark Kospi, which suffered a historic crash of 40 percent from its June peak early this month. As market heavyweights Samsung Electronics and SK Hynix remain vulnerable, the Kospi is experiencing frequent trading halts.
It seems trouble is coming from all directions at once. As markets grapple with West Asian supply disruptions and other trade uncertainties, the AI-heavy markets that thrived on liquidity are cracking under tighter financial conditions that are worsening the already-complicated outlook. The only respite this week was the rupee, which corrected to about 94.50 from record lows of near 97 against the US dollar. The Indian currency is holding up well, thanks to heavy RBI intervention; but it too would face the music if the dollars deplete faster than expected.
