Indian Markets Extend Losing Streak as Crude Surpasses $91 and FII Outflows Continue

Indian equity markets extended their losing streak to a sixth consecutive session, as the Nifty 50 settled at 24,154.90, down 132.75 points or 0.55 per cent. The benchmark index breached the 24,200 support level that had held for most of the previous week, marking its worst six-session performance in recent weeks with a total decline of 1.7 per cent over the period. The Sensex similarly closed down by approximately 0.6 per cent at 77,235.46.

The market downturn was largely attributed to external factors, notably the expiration of a temporary US-Iran ceasefire and Washington's decision to rule out an extension. This development, alongside fading hopes for a West Asia resolution, pushed Brent crude prices above $91 a barrel. WTI crude also climbed to around $84 a barrel, with domestic crude futures trading above ₹8,000, raising renewed concerns regarding India's import bill and current account deficit.

Foreign institutional investors (FIIs) maintained selling pressure, offloading equities worth ₹2,535 crore on Monday in their heaviest single-day selling in three weeks. This capital flight was further compounded by the US 10-year Treasury yield holding near 4.73 per cent, increasing the relative attractiveness of dollar assets over emerging markets. Consequently, the rupee weakened by 0.15 per cent to approximately ₹95.68-95.7 against the dollar, prompting intervention by the Reserve Bank of India to limit further depreciation.

Sector-wise performance remained varied. The IT sector bore the heaviest losses, with the Nifty IT index declining nearly 2 per cent for the third consecutive session. Sustained selling pressure was also observed in Realty, PSU Banks, and FMCG. Conversely, Healthcare, Auto, and Media bucked the broader trend to close in positive territory. Broader markets showed relative stability; the Nifty Smallcap 100 ended flat, while the Nifty Midcap 100 slipped 0.43 per cent.

On the domestic policy front, the government approved 31 new investment proposals worth ₹7,877 crore under the Electronics Component Manufacturing Scheme. This addition brings total approved investments to ₹69,548 crore, surpassing the scheme's original target of ₹59,350 crore.

Market analysts project that near-term sentiment will remain subdued due to elevated energy prices and ongoing geopolitical uncertainties. Technical analysts point to 24,000 and 23,800 as the next downside support levels for the Nifty, while identifying 24,250 as the primary hurdle for any potential market recovery.

"The recent downturn in the equity markets highlights how external macroeconomic shocks, such as rising crude prices and shifting US Treasury yields, directly impact emerging markets like India. While foreign institutional outflows and geopolitical tensions create short-term volatility and pressure on the rupee, the structural resilience of domestic fundamentals and ongoing policy initiatives—such as the expansion in electronic manufacturing investments—provide a solid foundation. Founders and investors should maintain a long-term perspective, focusing on cash flow management and operational efficiency while navigating this period of near-term market correction." — Dr. Shishir Gupta, Founder & CEO, StartupLanes