Indian equities posted their eighth straight weekly loss as sustained FII selling weighed on sentiment. On October 1, the Sensex closed 571 points lower. Pabitro Mukherjee said, "Foreign Institutional Investors continued to remain net sellers in the past week." Rising crude prices and high US bond yields also kept markets under pressure.
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Indian equities have posted their eighth straight weekly loss, the longest such streak in 25 years, as sustained FII selling, elevated US bond yields and higher crude prices weighed on sentiment.
On October 1, the Sensex closed 571 points and the Nifty declined 0.88%, extending losses for a fourth straight session.
With the market under pressure, Bajaj Broking and Motilal Oswal have identified persistent foreign institutional investor (FII) outflows and a challenging global environment as the primary reasons for the lacklustre showing.
"Foreign Institutional Investors (FIIs) continued to remain net sellers in the past week, offloading equities worth Rs 349.7 billion based on provisional exchange data," Bajaj Broking deputy vice president (research) Pabitro Mukherjee said.
On the other hand, domestic institutional investors (DIIs) offered strong support, emerging as net buyers with investments totalling Rs 334.6 billion, he added.
The trend was also visible through September. "FIIs have pulled out a substantial Rs 440.1 billion from Indian equities during September 2026, while DIIs have infused Rs 760.3 billion during the same period," Mukherjee further said.
Mukherjee said elevated US bond yields, firm Brent crude prices and sustained FII outflows continued to weigh on sentiment, while uncertainty over a possible Iran peace deal and a depreciating rupee added to investor caution. He also flagged inflation and the domestic macro outlook as concerns amid higher crude prices.
Motilal Oswal, meanwhile, noted that the Nifty fell 6.1% in September, its second consecutive monthly decline and the second-steepest monthly fall since October 2024. The index is down 13.4% in 2026 so far.
FIIs recorded $4.1 billion of outflows from Indian equities in September after two months of inflows, taking their CY26 outflows to $28.3 billion. DIIs, in contrast, invested $8 billion in September and $67.8 billion so far this year.
The brokerage also noted broad-based weakness, with Technology, Financials Ex Banks, Automobiles, PSU Banks and Capital Goods among the sectors that declined in September.
With FII selling remaining a key headwind, Bajaj Broking said Brent crude prices and developments around US-Iran geopolitical tensions will remain important drivers of market sentiment and foreign institutional flows.