Indian benchmark shares post longest weekly losing run in 25 years

Indian benchmark shares posted their eighth straight weekly loss, the longest such streak in 25 years, as record foreign selling, crude prices near $100 a barrel and a surge in global yields sent risk sentiment plunging.

The Nifty 50 dropped 3.1% and BSE Sensex dipped 2.7% in the holiday truncated week, bringing their eight-week losses to 8.7% and 8.4%, respectively.

The benchmarks also marked their steepest weekly decline in more than six and four months, respectively.

Indian markets are closed on Friday for a local holiday.

“We are very close to the bottom. I do not expect another 10% fall from here, but neither do I see a sharp recovery in the next three to four months,” said Prasenjit Paul, head equity analyst at Paul Asset and fund manager at 129 Wealth Fund.

Foreign outflows hit a record $27.8 billion so far this year, while the Brent crude still hovered above $100 a barrel.

Meanwhile, the US 10-year Treasury yield hit its highest level since mid-June 2007. Higher US yields make risky emerging market assets such as Indian equities less attractive to overseas investors.

Until foreign investors return and crude prices ease, the Reserve Bank of India’s “ability to support growth may remain constrained, as higher oil prices risk reigniting inflationary pressures,” Paul said.

The RBI is expected to raise interest rates by 25 basis points to 5.50% on October 7, the first increase since 2023, according to a Reuters poll of economists.

The Indian rupee hit a two-month low and the benchmark 10-year yield rose to its highest level in more than two years.

Fifteen of the 16 major sectors logged weekly losses. The broader small-caps and mid-caps fell 3.4% and 3.6%, respectively.

Auto shares fell 5.9% and consumer durables lost 6.2% this week as a weak monsoon intensified concerns around demand and spending.

On the day, the Nifty 50 slid 0.88% to 22,421.95 and Sensex dipped 0.79% to 71,909.70.

IT jumped 2.2% on the day and was the only sector to log weekly gains, up 0.5%, after US inflation rose slower than expected, lessening rate-hike probabilities.