Foreign capital accelerates withdrawal, Indian stock market faces "the worst consecutive decline in twenty-five years"!

The Indian stock market remained under pressure on Thursday. As of press time, the Nifty 50 had fallen 0.61% to 22,481.85 points, while the BSE Sensex was down 0.51% to 72,107.63 points. If the indices close lower this week, both will record an eighth consecutive week of losses—the longest such weekly losing streak in 25 years.

Meanwhile, the Indian market will be closed on Friday due to a local holiday. HST Wealth founder and CEO Hariselvan Radhakrishnan said: "Since the market is closed tomorrow, today’s trading reflects cautious portfolio rebalancing ahead of the long holiday."

Foreign selling surges, net sales hit record high this year

Data shows that on September 30 alone, foreign investors had net sold about $1.06 billion (approximately 101.48 billion rupees) in Indian stocks.

In comparison, over the previous five trading days, foreign investors sold a total of about $3.6 billion, with a daily average of $720 million. The single-day sale on Wednesday was notably higher than this average.

Overall, net foreign sales since the start of the year have reached $27.8 billion, setting a record high.

Hariselvan Radhakrishnan pointed out: "Continued foreign outflows, combined with high borrowing costs, keep weighing on market sentiment—even though the recent drop in crude oil prices has provided some relief."

Friday’s closure means investors cannot adjust their positions promptly after any overnight risk events, which somewhat intensified Thursday’s cautious sentiment during trading.

Brent crude oil futures fell to around $97 a barrel on Thursday. Previously, Iran stated it had received a response from the US regarding its latest ceasefire proposal, whereas US President Trump had publicly rejected the proposal in recent days. The decline in oil prices has provided some breathing space for markets recently pressured by soaring energy costs.

Sector divergence: Automobiles lead declines, IT rises against the trend

Out of 16 major sectors, 11 recorded losses.

The automobile sector saw the most significant drop, with the automobile index down 2.4%. Bajaj Auto plunged 6% in one day, while Mahindra & Mahindra fell 2.4%. Both companies reported declines in domestic sales.

Small cap and mid cap indices fell 0.6% and 0.3%, respectively.

The IT sector, however, rose 0.9% against the trend. Previously released data showed US inflation in August was lower than expected, reducing the likelihood of a US Federal Reserve rate hike this month and boosting sentiment in tech stocks.

Among individual stocks, Kotak Mahindra Bank rose 3%. The bank announced the appointment of Anup Kumar Saha as new CEO for a three-year term, replacing Ashok Vaswani.