Summary:
Nifty 50 ended the September expiry at 22,716.20, while the September F&O series fell 6.7%. Rising US Treasury yields, elevated crude oil prices, foreign investor selling and expiry-related volatility kept Indian equities under pressure as markets entered October.
The Nifty 50 has completed seven consecutive weeks of losses, its longest weekly losing streak since 2020, as high crude oil prices, rising global bond yields and persistent foreign selling weigh on Indian equities. Historical market data shows that similar prolonged declines have often been followed by a short-term recovery, though the present macro environment remains challenging.
The weakness continued into the final days of September, with the Nifty closing at 22,620.45 on September 30, down 95.75 points or 0.42%. The index lost about 6.1% during September, recording its biggest monthly fall since March 2026.
Seven Straight Weeks of Selling
The Nifty ended the week of September 25 at 23,140.50, completing its seventh consecutive weekly decline. The losing streak was the longest in six years, driven by weakness across financials, IT and several broader-market segments.
Interestingly, the magnitude of the latest seven-week correction has been considerably smaller than previous comparable episodes.
| Period ending | Previous 7-week return | Next 6-week return |
| March 30, 2001 | -18.3% | -0.7% |
| September 21, 2001 | -20.5% | +16.8% |
| July 4, 2008 | -22.1% | +10.3% |
| April 3, 2020 | -33.3% | +13.0% |
| September 25, 2026 | ~-5.8% | NA |
In three of the four earlier instances, the index delivered positive returns during the following six weeks. However, past performance by itself does not establish that the current correction has ended.
The 2026 decline has been more of a gradual erosion than the sharp collapses seen during the 2001, 2008 and 2020 episodes.
Oil, Bond Yields & FII Selling Remain Key Risks
External factors have played a major role in the current market weakness. Brent crude surged above $100/barrel during September as disruptions in West Asian energy supplies increased concerns over availability. Brent settled at $105.28/barrel on September 28 following renewed uncertainty around the US-Iran situation.
Higher crude is particularly important for India because of the country's dependence on imported oil. Sustained high prices can increase inflationary pressure, affect the current account and raise input costs for companies.
At the same time, US Treasury yields have moved above 5%, increasing the relative attractiveness of dollar-denominated fixed-income assets. The US 10-year yield climbed beyond 5.2% during the final week of September.
Foreign investors also intensified selling. FIIs recorded cumulative cash-market selling of about ₹44,013 Cr during September, including heavy selling towards month-end.
September Leaves Markets Bruised
September proved particularly difficult for Indian equities. The Nifty's monthly decline of around 6.1% was accompanied by broad pressure across sectors and a sharp erosion in market capitalisation.
India's listed market lost about ₹18.4 L Cr in market capitalisation during September, even though the broader market remained positive on an H1FY27 basis.
On September 30:
- Nifty 50: 22,620.45, -0.42%
- Sensex: 72,480.29, -0.07%
- Nifty Bank: 54,633.05, +0.69%
- ₹/US$: ₹95.82
- September Nifty return: ~-6.1%
The weakness has continued into October. On October 1, the Nifty 50 slipped to around 22,559 during trade, putting it on course for an eighth consecutive weekly decline. Such a streak would be the longest in about 25 years.
Can History Repeat?
Historical data suggests prolonged weekly declines can create conditions for a technical rebound as selling pressure moderates. However, today's backdrop differs significantly from previous episodes.
Crude oil above $100/barrel, elevated US bond yields, a weak rupee and continued foreign selling remain immediate hurdles. A sustained recovery would therefore require more than a short-covering bounce, with stability in global yields, oil prices and institutional flows likely to remain important.
The seven-week decline has certainly increased the possibility of a near-term relief move, but whether that develops into a durable market recovery will depend largely on how these macro pressures evolve.
