Nifty’s Eight-Week Losing Streak: Fear, Fatigue or a Bigger Reset?

If you are an active market participant, the long weekend could not have come at a better time, as the selling pressure shows no signs of abating. Indian markets are shut on Friday for Gandhi Jayanti, and after the week we have had, investors may welcome the pause. There was political theatre too. President Trump floated the idea of renaming the Strait of Hormuz “Trump Strait” and Artificial Intelligence “Super Intelligence”. Those remarks made headlines, but markets had far more serious matters to absorb.[EasyDNNnews:PaidContentStart]

The first is oil. Crude movement through the Strait of Hormuz improved sharply through September, several times August volumes, as Saudi Arabia found ways to move more barrels through and around the contested route. Yet Iran’s effective closure of the strait, in place since the US-Israel strikes in late February, has not been fully reversed. At the UN General Assembly, Iran reportedly proposed through Qatari mediation a seven-day plan to reopen the strait and restart nuclear talks in return for an end to the US naval blockade and limited sanctions relief. Washington rejected it. Oil has eased from its higher levels of the year, but remains well above where 2026 began. Unless tensions flare again, another sharp spike looks less likely, but a quick return to normal also seems unrealistic.

The second issue is bond yields. Government bond yields and mortgage rates across the US, Japan and other developed markets have climbed to levels not seen in years. Banks, insurers and pension funds face mark-to-market losses, companies face higher refinancing costs and fiscally stretched governments must pay more to service debt. In my view, this is the most important known risk across asset classes because it works slowly and everywhere.

Then there is India. The Nifty registered eighth consecutive weekly decline, a run not seen in 25 years. Back-calculated history shows how unusual this is. Similar extended declines were seen in 1993 and 2001, while the 2008 global financial crisis and the Covid crash of 2020 produced seven-week losing streaks. What makes the current phase different is the lack of a domestic crisis. Growth remains healthy, corporate earnings are holding up, banks are in better shape, liquidity is available and political stability is intact. The market is correcting despite a firm domestic backdrop.

Geopolitics is shifting as well. During Xi Jinping’s state visit to Washington, the US and China avoided the most contentious issues and instead announced an eight-point understanding covering tariff reductions, AI dialogue and a bilateral trade and investment council. Whether this becomes a lasting reset or merely a tactical pause is unclear. After years of American policy aimed at containing China’s rise, even temporary softening matters.

India, meanwhile, is in no hurry to force a trade deal with Washington. Commerce Minister Piyush Goyal has indicated that the bilateral agreement is largely ready, but India wants preferential tariff treatment relative to competing exporters rather than a deal signed simply to meet a deadline. External Affairs Minister S Jaishankar’s UN engagements carried a similar message: India wants strategic flexibility, not dependence on any one bloc.

The Russia and Iran sanctions law signed by President Trump adds another layer. It gives him authority to impose tariffs of up to 100 per cent on major buyers of Russian oil and gas. China and India are the obvious targets, yet neither has shown any intention of stepping back. Whether those powers are used or retained as negotiating leverage will matter. With inflation risks still sensitive and bond yields elevated, Washington may hesitate to take steps that push energy costs higher.

These developments are connected. Oil influences India’s inflation, fiscal balance and rupee. Global yields determine the cost of capital. The US-China-India triangle shapes tariffs, trade access and capital flows. None points to an immediate crisis. Together, however, they suggest a more volatile and less forgiving environment than the easy-money years encouraged investors to expect.

A closing thought: the Gita’s idea of Nishkam Karma asks one to focus on action without becoming attached to the outcome. Markets demand something similar. Follow the process, read the data, rebalance when needed and do not let every headline dictate the next move.

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