Indian stock markets have fallen for eight consecutive weeks, the longest streak of losses since 2001. The decline is driven by massive foreign investor outflows of over ₹3 lakh crore in 2026, a weak rupee near ₹96 per dollar, and elevated crude oil prices. With the market struggling, all attention has shifted to the Reserve Bank of India’s policy meeting starting today, where economists expect a potential interest rate hike to control inflation.
Indian benchmark indices have officially recorded an eight-week losing streak, a period of decline not seen since 2001. As of October 1, 2026, the Nifty 50 closed at 22,421.95, while the Sensex ended at 71,909.70. This persistent downward movement reflects a broader lack of confidence, with markets consistently failing to hold support levels in recent trading sessions.
The selling pressure is largely tied to significant macroeconomic challenges. Foreign Institutional Investors (FIIs) have been net sellers throughout 2026, withdrawing more than ₹3 lakh crore from Indian equities. This trend has been worsened by the weakening Indian rupee, which is trading near ₹96 against the US dollar. Additionally, Brent crude oil prices remain elevated near $100 per barrel, and high US Treasury yields above 5% continue to draw capital away from emerging markets, including India.
Sectoral performance has been mixed, with specific pressure on the auto sector. Companies like Bajaj Auto saw share prices decline by approximately 7% to 9% after September sales figures missed market expectations. While management pointed to supply-chain constraints rather than a collapse in demand, the market reaction reflects investor sensitivity to any signs of slower growth in consumer spending. Higher input costs and potential inflationary pressure on the common consumer remain key concerns for manufacturing companies.
Looking ahead, the market's focus has turned toward the Reserve Bank of India (RBI). The Monetary Policy Committee is scheduled to meet from October 5 to October 7, 2026. Many economists anticipate a 25-basis-point repo rate hike to 5.50% to manage the risks of rising inflation. Investors are particularly concerned that if the central bank adopts a hawkish stance to curb price rises, it could lead to higher borrowing costs for businesses and individuals, further impacting growth sentiment.
The primary monitorable for the coming week will be the official RBI policy statement on October 7. Beyond the interest rate decision, market participants will look for management commentary from leading companies regarding their ability to pass on costs to consumers and maintain profit margins in an environment of high energy prices and currency depreciation. Until the indices show signs of stabilizing above key moving averages, market sentiment is likely to remain cautious.