India’s stock markets are in the midst of their longest losing streak in nearly three decades, with benchmark indices Sensex and Nifty witnessing relentless declines over the past five months.
Mounting global economic concerns, persistent foreign investor withdrawals, and underwhelming corporate earnings have combined to create a sustained period of turbulence on Dalal Street.
The downturn has been particularly stark given the record highs observed merely a few months ago.
In September 2024, the Sensex scaled a peak of nearly 86,000, while the Nifty surged past 26,200.
At the time, analysts were predicting even greater milestones, with some expecting the Sensex to breach 90,000 and the Nifty to approach 30,000.
However, the market euphoria has since evaporated, replaced by widespread investor anxiety.
Sharp decline in benchmark indices
February closed on a grim note, marking the fifth consecutive month of declines—an occurrence not seen since 1996.
On Friday, the Sensex tumbled over 1,400 points to settle at 73,198, while the Nifty shed 420 points to close at 22,124.
This marked the eighth straight session of declines for the Nifty.
The sheer scale of the losses has been significant, with approximately ₹9 lakh crore of investor wealth wiped out in a single day.
Since its September 2024 peak of 85,978, the Sensex has shed a staggering 12,780 points, representing a decline of 15 per cent.
The Nifty has fared even worse, plummeting nearly 16 per cent from its record high of 26,277.
Factors driving the downturn
Market analysts attribute the sustained sell-off to a combination of factors.
“Investor sentiment has taken a hit due to escalating trade tariff concerns and unfavourable global cues,” said Vinod Nair, Head of Research at Geojit Financial Services.
“The IT sector has borne the brunt, as fears of a U.S. slowdown and deal deferrals weigh on the industry. Small and mid-cap stocks, already struggling with valuation concerns, have also taken a beating,” he added.
Foreign institutional investors (FIIs) have maintained a steady outflow of funds from Indian equities.
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On Thursday alone, FIIs sold stocks worth ₹556.56 crore, even as domestic institutional investors (DIIs) attempted to stabilise the market with purchases amounting to ₹1,727 crore, according to data from the National Stock Exchange (NSE).
Technical analysts caution that the markets remain in a precarious position.
“Nifty is approaching the crucial support zone of 21,800-22,000. A sustained move above 21,800 could trigger a rebound, but failure to hold this level may lead to another sharp decline,” said Rupak De, Senior Technical Analyst at LKP Securities.
Ajit Mishra, Senior Vice-President, Research at Religare Broking, advised traders to exercise caution.
“Given the prevailing weakness, it’s best to manage leverage carefully and prioritise hedged trades. A clear sign of reversal is still lacking,” he noted.
Historical parallels
The current slump is being compared to previous instances of prolonged market downturns. The last time the Nifty posted five consecutive months of losses was between July and November 1996.
The longest losing streak on record remains an eight-month decline from September 1994 to April 1995.
A key contributor to the ongoing weakness has been the shift in global investment patterns.
“With declining US bond yields signalling a flight to safe-haven assets, FII flows are moving to cheaper markets,” said Nair.
“The ongoing tariff war is another major headwind that could further impact market sentiment,” he added.
Despite the prevailing gloom, some market observers suggest that a relief rally may be on the horizon.
“We are close to market capitulation, and oversold conditions could trigger a short-term rebound next week,” said Satish Chandra Aluri of Lemonn Markets Desk.
“However, overall, we expect volatility with a downward bias in the near term,” Aluri added.
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