Why Is the Indian Stock Market Falling? The Longest Weekly Losing Streak in 25 Years Explained

Oct 2, 2026 · 3 min read · Sourced and fact-checked

The short answer: The Nifty 50 has now closed lower for eight weeks in a row, the longest such run since 2001. Expensive oil, record-level US bond yields, heavy foreign selling, a weak rupee and the Middle East conflict explain most of it. Here is how each factor works.

India's benchmark stock indices ended September 2026 with an eight-week losing streak, the longest in 25 years, according to Indian Express and NDTV Profit. On Thursday, October 1, the Sensex closed at 71,909.70 (down 0.8%) and the Nifty 50 at 22,421.95 (down 0.9%). Markets are closed on Friday, October 2, for Gandhi Jayanti.

The numbers

The Nifty has lost more than 8.5% over the past eight weeks and had its lowest weekly close since April 2025 (NDTV Profit).
Both indices fell about 6% in September, their worst month since March (Financial Express).
An intraday slide on Thursday wiped out about Rs 9 lakh crore of investor wealth in around an hour, before part of it was recovered (Indian Express).
The India VIX, a measure of expected volatility, rose 7% to a more than three-month high (Indian Express).

Why it is happening

1. Foreign investors are selling

Foreign portfolio investors sold Rs 10,148 crore of Indian equities on September 30, their biggest single-day outflow in nearly six months, and about Rs 44,013 crore over September, NDTV Profit reports. They were net sellers on 16 of 21 trading days. Indian Express puts foreign selling at about USD 3.8 billion for the month, after two straight months of buying.

Domestic institutions have been buying, which has cushioned the fall but not stopped it.

2. US bond yields are very high

The US 10-year Treasury yield is around 5.3%, its highest since 2002, and the 30-year yield is above 5.6%, according to NDTV Profit. When safe US government bonds pay this much, investors have less reason to hold riskier emerging-market stocks. Higher global yields also raise borrowing costs everywhere.

3. Oil is near USD 100

Brent crude is around USD 99 to 100 a barrel. India imports most of its oil, so higher prices raise its import bill, push up inflation and squeeze company profits. For more on this, see why the rupee is falling.

4. The rupee is weak

The rupee closed at 96.31 per dollar on October 1, its weakest in two months. A weaker rupee cuts the dollar value of Indian shares for foreign investors and adds to inflation.

5. Geopolitics

Indian Express notes the situation in West Asia has dragged on since late February, and US-Iran negotiations have moved back and forth for months without a conclusion. Markets were hoping for a ceasefire so that attention could return to earnings and growth.

6. Weak spots in specific sectors

Auto stocks were hit hard after weaker-than-expected September sales: Bajaj Auto fell about 8% on Thursday, and Maruti Suzuki and Mahindra & Mahindra hit 52-week lows (Indian Express). IT stocks went the other way, with the Nifty IT index up about 2%.

What could change things

The RBI decision on October 7. The market expects a 25 basis point rate hike. Experts quoted by Indian Express say that could be a short-term negative because it narrows the interest rate gap with the US. Read our explainer: RBI's October 2026 rate decision.
Oil and the Middle East. A deal or ceasefire that lowers oil would remove several pressures at once.
US yields. If they stop rising, foreign selling could ease.
Festive demand and earnings. October's festive season will show how strong consumer demand is.

PL Capital's Vikram Kasat said domestic fundamentals alone may not be enough for a lasting recovery while global liquidity stays tight.

What this means if you invest

A falling index does not tell you what any single stock will do, and nobody can say when a streak ends. Streaks like this are rare, but they have ended before. Long-term investors usually focus on their time horizon and diversification instead of reacting to weekly moves. This article is not investment advice.

Facts checked October 1, 2026.

Sources

Indian Express, "Sensex, Nifty fall 1% as losing streak hits 25 years" (October 1, 2026): https://indianexpress.com/article/business/market/indian-stock-markets-worst-losing-streak-25-years-10902435/
NDTV Profit, "Indian markets log 8th straight weekly decline: six factors" (October 1, 2026): https://www.ndtvprofit.com/markets/indian-markets-log-8th-straight-weekly-decline-six-factors-driving-the-worst-selloff-in-25-years-12125064
Financial Express, "Rupee ends at 96.31" (October 1, 2026): https://www.financialexpress.com/policy/economy/rupee-ends-at-96-31crude-oil-surging-yield-and-fii-selling-weigh-on-currency/4351635/