Sensex Tumbles 2,360 Points Over Four Sessions as Foreign Outflows Hit Record $27.8 Billion

Indian equities continued their downward spiral on Thursday, October 1, 2026, putting benchmark indices on course for their eighth consecutive weekly loss—the longest weekly losing streak witnessed on Dalal Street since 2001.

The BSE Sensex tumbled more than 950 points from Wednesday's close to touch an intraday trough of 71,527.28. The NSE Nifty 50 slumped in tandem, shedding nearly 320 points to an intraday low of 22,301.30. Across the four sessions since the previous Friday's close, the scale of the retreat has widened considerably: the Sensex has surrendered over 2,360 points, while the Nifty 50 has bled nearly 840 points.

Historic Capital Flight by Foreign Investors

The primary catalyst behind the persistent market rout is unprecedented institutional selling. Foreign Institutional Investors (FIIs) offloaded a net ₹10,148 crore ($1.06 billion) in equities on Wednesday alone. That took foreign institutional disposals across just two trading sessions to ₹20,128 crore.

With this latest wave of liquidation, total foreign capital pulled out of Indian equities in 2026 has reached a record $27.8 billion. Market strategists point to elevated US 10-year Treasury yields, which rose toward 5.3%, as a primary force sucking capital out of emerging markets and back into high-yielding dollar assets.

"The sustained FII selling became intense during the last two trading days when the FIIs sold equity for a total of Rs 20,128 crore," said V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited. "With the US 10-year bond yield rising further to 5.3 per cent, FIIs may continue to sell. An apparent contradiction in the FII activity is that even while selling through the exchanges, they have been consistently investing through the primary market and also buying expensive mid and smallcaps."

Sectoral Pain and Pockets of Resilience

Market breadth remained heavily skewed toward declines, with broader indices also sliding under intense selling pressure. The Nifty Smallcap 100 dropped 1.07% and the Nifty Midcap 100 shed 0.72%.

Key Losers on Dalal Street:

• The automobile sector took the hardest hit, with the Nifty Auto index falling by 3%.
• Bajaj Auto plunged 6% and Mahindra & Mahindra dropped 2.4% following muted monthly domestic sales updates.
• Heavyweight industrials and infrastructure names, including UltraTech Cement, Maruti Suzuki, and Asian Paints, witnessed steady liquidations.

Pockets of Strength:

• Kotak Mahindra Bank emerged as a standout gainer, rallying up to 4% after the private lender announced the appointment of Anup Kumar Saha as its new Managing Director and CEO for a three-year term, succeeding Ashok Vaswani.
• The Nifty IT index rose around 0.9%, finding support from softer-than-expected US inflation data, which offered relief to tech heavyweights such as Infosys, Tata Consultancy Services, and HCLTech.

Oil Moderation Cushions Further Downside

While macroeconomic uncertainty remains high, a slight easing in international energy markets provided a partial buffer against an even steeper decline. Brent crude futures cooled below the $100 per barrel mark to hover near $97 per barrel as diplomatic negotiations between Washington and Tehran resumed, providing temporary respite to India's import bill concerns.

Technical analysts note that the protracted eight-week slump marks the benchmark's longest run of weekly declines since 2001, when the Nifty dropped for nine straight weeks. Although the overall percentage correction during this cycle—around 6% to 7%—is shallower than the steep crashes of 2008 and 2020, sustained foreign outflows continue to keep market participants cautious heading into the upcoming domestic market holiday.

Tags: BSE Sensex NSE Nifty 50 Foreign Institutional Investors Kotak Mahindra Bank Automobile Sector Information Technology Sector