Sensex Extends Losing Streak; Nifty Flat Amid Weak Global Cues

By Sarhind Times Business Desk

Mumbai, Sept 30: Indian stock markets struggled yet again on Monday, with the benchmark BSE Sensex posting its seventh straight loss and the NSE Nifty closing flat after intraday swings, reflecting fragile investor sentiment amid jittery global cues, sustained foreign fund outflows, and heightened volatility ahead of key macroeconomic data releases later this week.

Market Recap: A Tense Trading Day

The trading session began on a tentative note, with GIFT Nifty in pre-market trade hinting at a muted start. True to expectations, the Sensex opened marginally lower, oscillated through the session, and eventually settled in the red. Meanwhile, the Nifty managed to claw back from deeper losses but finished nearly unchanged, highlighting the cautious mood across Dalal Street.

Sectorally, information technology and auto counters bore the brunt of selling pressure, while select banking and oil & gas stocks provided momentary relief. The intraday breadth, however, remained mixed—underscoring a tug-of-war between domestic inflows and persistent foreign institutional investor (FII) outflows.

Key Indices at Close

Sensex: Closed marginally lower, extending its losing streak to seven consecutive sessions.
Nifty 50: Ended flat, after recovering from deeper intraday losses.
Broader Markets: Nifty Midcap and Smallcap indices displayed resilience, though volatility stayed elevated.

Why the Weakness Persists

Several factors have combined to keep risk appetite under check:

Global Jitters:
- US Treasury yields rose further, making equities less attractive compared to bonds.
- Concerns over Middle East tensions added a geopolitical risk premium, prompting foreign funds to trim positions.
Persistent FII Selling:
- Foreign portfolio investors have been net sellers for multiple sessions, citing valuation concerns and better risk-reward in global markets.
- Domestic institutional investors (DIIs) have attempted to provide support, but their inflows have not been enough to counter the exodus of foreign money.
Currency Woes:
- The Indian rupee stayed weak against the US dollar, with USD/INR futures hovering near recent highs.
- Import-sensitive sectors such as oil marketing companies, aviation, and autos have turned cautious.
Macro Data Uncertainty:
- Investors are awaiting India’s monthly turnover figures and inflation-related macro prints later this week.
- Any downside surprise could worsen sentiment further.

Sectoral Performance

IT Stocks: Weakness persisted as global clients trimmed discretionary spending. Rising US yields made technology valuations less appealing.
Auto Stocks: Mixed performance, with concerns about raw material costs due to a stronger dollar.
Banking: Select large-cap banks provided brief intraday support, though caution prevailed.
Oil & Gas: Gained modestly as crude price movements offered some relief to refiners.
PSUs: A few public sector companies saw stock-specific action amid ongoing government divestment and order news.

Analyst Views

Market participants shared cautious commentary:

Technical Analysts noted that Nifty faces stiff resistance around 20,000 and immediate support around 19,500 levels.
Fund Managers highlighted the role of domestic mutual fund inflows in cushioning the fall but warned that “as long as FIIs continue to sell, volatility will stay high.”
Currency Experts underlined that a persistently weak rupee could deter foreign inflows in the short term, keeping import-heavy companies under pressure.

Short-Term Outlook

Stock-Specific Action: Analysts expect rotation into defensives like FMCG and pharma.
Volatility: Expected to remain high around monthly expiry and turnover.
Medium Term: Dependent on how earnings season pans out, along with global risk appetite.

Broader Global Context

The nervousness in Indian equities cannot be viewed in isolation. Globally:

US markets have been choppy due to concerns over Fed policy and sticky inflation.
Asian peers mirrored the weak sentiment, with Japanese and Chinese markets struggling for direction.
Crude oil has shown volatility amid geopolitical headlines, feeding into inflationary fears.

Investor Sentiment

Retail traders remain hesitant. Short-term traders are preferring hedges, buying options to protect portfolios, while long-term investors are staggering fresh buying on dips.

A veteran broker on Dalal Street summed it up:

“We are in a phase where sentiment is running the show more than fundamentals. Traders must respect stop-losses, and investors should not panic but rather accumulate quality names gradually.”

Historical Perspective

This is not the first time Indian indices have faced such prolonged weakness. Historically, 7–10 day losing streaks often coincide with periods of global volatility, only to be followed by strong rebounds once clarity emerges. For long-term investors, this may be a phase of consolidation rather than capitulation.

The Indian stock market remains in a delicate balance. With global uncertainties, weak currency cues, and persistent foreign outflows, the short-term outlook remains volatile. Yet, underlying fundamentals—strong GDP growth, resilient corporate earnings, and steady domestic inflows—could provide the ballast needed for recovery. Until then, Dalal Street is braced for more choppy sessions.

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