Indian equities fell for the third straight week, with the BSE losing over ₹2 lakh crore in market value. A sustained exit by foreign investors continues to pressure the indices, despite buying support from domestic institutions.
Indian share markets are facing a tough run as benchmarks logged losses for the third week in a row. The broader market sentiment remains shaky as foreign institutional investors (FIIs) continue to pull money out of the country. This trend has now persisted for five weeks, during which foreign investors sold shares worth ₹11,490.03 crore. While domestic institutional investors (DIIs) have tried to stabilize the market by purchasing ₹16,398.15 crore in equities, the selling pressure from global investors has been strong enough to wipe out more than ₹2 lakh crore in total market capitalization from firms listed on the BSE.
The benchmark BSE Sensex dropped 0.53% to close at 73,895.74, while the Nifty 50 fell 0.88% to 23,140.5. Smaller companies bore the brunt of the weakness, with the Nifty Midcap 100 index dropping 2% and the Nifty Smallcap 100 sliding by nearly 1%. The weakness in the broader market suggests that investors are becoming more cautious as volatility remains elevated.
The market is currently seeing a clear shift in sector preference as global macro headwinds, such as rising bond yields and geopolitical tensions, weigh on sentiment. Investors are moving away from interest-rate-sensitive sectors, which led to a 2.4% drop in the Nifty IT index and a 1.5% decline in the Private Bank index. On the flip side, defensive sectors have shown some resilience. Areas like Pharma, FMCG, and Consumer Durables rose by 1%, while the Realty sector managed a 3% gain, suggesting that some capital is rotating toward stable or policy-sensitive plays.
For those tracking market levels, the 23,300 mark on the Nifty 50 remains a crucial hurdle. As long as the index stays below this point, the market may continue to experience a downward bias. Analysts point out that a recovery above 23,600 would be necessary to shift the current 'sell on rallies' sentiment toward a more neutral stance. Until the global macro environment stabilizes, investors are likely to remain focused on the impact of foreign capital flows and interest rate trends on market stability.