Indian Markets Extend Losing Streak to 7 Weeks as Crude, FPI Selling Weigh on Sentiment

Indian equity benchmarks ended higher on Friday, but the modest rebound was not enough to prevent the market from recording its seventh consecutive weekly decline. The losing streak is the longest since the post-pandemic market rout, with elevated crude oil prices, persistent foreign portfolio investor selling and concerns over earnings growth continuing to weigh on sentiment.

The Nifty 50 rose 0.34 per cent to 23,140.50 on Friday, while the Sensex gained 0.43 per cent to 73,895.74. Despite the gains, the indices ended the week lower, with the Nifty 50 declining 0.88 per cent and the Sensex falling 0.53 per cent.

The Sensex’s seven-week decline from 14 August to 25 September matches its losing streak during the February-April 2020 pandemic sell-off. The current streak also exceeds the six-week declines recorded in early 2026 amid West Asia tensions and rising crude prices, and in mid-2025 when U.S. tariff concerns and subdued earnings weighed on sentiment. The index also recorded five-week losing stretches in 2022 and 2023.

Crude oil futures fell 1.4 per cent to USD 105.06 a barrel on Friday as investors weighed hopes of a possible U.S.-Iran truce against renewed risks to Saudi Arabia’s oil infrastructure. However, crude prices above USD 100 a barrel continued to remain a major headwind for India, given its dependence on oil imports.

The seven-week decline has been characterised by relatively modest weekly losses, suggesting a prolonged period of weakness rather than a sharp market capitulation. Elevated crude prices remain a key constraint, putting pressure on the rupee and inflation while limiting room for monetary easing.

Persistent foreign portfolio investor selling and heavy primary-market supply have also weighed on market rebounds. A sustained decline in crude oil prices could provide some relief, while investors are likely to monitor Brent crude, U.S. bond yields, foreign portfolio investor flows and early second-quarter business updates.

Sector performance remained mixed during the week. The BSE Realty index was the strongest performer, rising 3.4 per cent, while consumer durables gained 1.3 per cent. However, these gains were insufficient to offset weakness across several major sectors.

Telecommunications led the sectoral declines, falling 2.2 per cent, followed by information technology, which declined around 1.7 per cent. The power sector fell 1.5 per cent, while financial services, capital goods and automobile stocks also ended lower.

The recent sector divergence appears to reflect selective rotation rather than a broad-based shift. The weekly gain in realty could represent a technical rebound rather than a confirmed trend reversal, while IT continued to face pressure.

Financial stocks also remained under pressure following regulatory proposals from the Insurance Regulatory and Development Authority of India (Irdai) to lower commission caps and tighten expense norms. These changes could affect insurance distribution income for Banks and non-banking financial companies.

The upcoming quarterly earnings season is expected to provide a clearer assesSMEnt of demand, margins and profit growth. With earnings growth moderating, investors have become more selective rather than returning broadly to equities.

The contrast was particularly visible between domestic-demand-oriented sectors and businesses exposed to global spending. Selective buying supported some consumer-facing businesses, while cautious global spending and continued foreign selling weighed on IT and financial stocks.

Indian equities also underperformed several major Asian markets during the week. South Korea’s Kospi gained 2.7 per cent, Japan’s Nikkei 225 rose 2.1 per cent and Taiwan’s Taiex advanced 1.8 per cent.

However, regional performance was mixed. China’s CSI 300 declined 1.5 per cent, Hong Kong’s Hang Seng fell 1 per cent and Indonesia’s Jakarta Composite declined around 3.1 per cent.

India’s relative underperformance also reflects differences in market composition. South Korea, Taiwan and Japan have greater exposure to the global artificial intelligence and Semiconductor investment cycle, while Indian equities have relatively higher exposure to services and domestic demand.

Lower relative valuations have also helped attract global investors towards some East Asian markets. In India, elevated crude prices and moderating earnings growth continued to weigh on sentiment. Easing geopolitical tensions and lower oil prices could provide support to the domestic market.

India’s valuation premium also remains difficult to justify without stronger earnings upgrades. The upcoming results season could therefore be important in determining whether corporate earnings can support current market valuations.

Regulatory developments added another layer of uncertainty for financial stocks. The Securities and Exchange Board of India (Sebi) approved the Portfolio Managers route for Investing in Mutual Fund Units (PRIM), with a minimum investment requirement of Rs 25 lakh, below the Rs 50 lakh threshold for conventional portfolio management services.

The new route will allow portfolio managers to construct portfolios using direct mutual fund plans, including exchange-traded funds, Index Funds and specialised investment funds. Sebi also approved broader investment avenues for portfolio managers, including initial public offerings and primary debt issuances.

Separately, proposed changes to insurance commission and expense caps have raised questions about the balance between lower costs for insurers and the potential impact on distributor income.

The PRIM framework could broaden access to professional portfolio management and support wealth managers operating at scale, although revenue per client could be lower. The insurance proposals could favour efficient insurers while creating near-term pressure on distributor earnings. The final rules will determine the extent of the impact.

For Indian equities, elevated crude prices, persistent foreign selling, moderating earnings growth, global market trends and regulatory developments remain key factors shaping the market environment. The upcoming earnings season, crude oil prices, U.S. bond yields and foreign portfolio investor flows are likely to remain closely watched as investors assess the possibility of a sustained market recovery.

Disclaimer: The article is for informational purposes only and not investment advice.