Sensex falls for an eighth week as Brent crude returns to 100 dollars

Indian equities fell for a fourth straight session on 1 October and for an eighth straight week. The Sensex closed at 71,909.70, down 570.59 points, or 0.79 percent. The Nifty closed at 22,421.95, down 198.50 points, or 0.88 percent. Across the holiday-shortened week the Nifty lost 3.1 percent and the Sensex 2.7 percent, the steepest weekly drop in more than six months for the Nifty and more than four months for the Sensex. Over the eight-week run the two indices are down 8.7 percent and 8.4 percent.

Breadth matched the index. On the day, 2,916 stocks fell, 1,306 rose, and 191 were unchanged. Inside the Sensex, Maruti, Mahindra and Mahindra, Tata Steel, Adani Ports, ITC, Power Grid, Hindustan Unilever and Eternal led the declines. Infosys, Tata Consultancy Services, HCL Technologies, HDFC Bank and Kotak Mahindra Bank finished higher. The split is the useful part. Exporters with dollar revenues held up. Auto, metal, energy and consumer names did not. That is the signature of a session driven by oil, yields and foreign selling, rather than by a single domestic earnings miss.

Foreign portfolio investors sold Rs 10,148 crore of Indian shares on Wednesday. That took selling for the year to about $27.8 billion, and selling over the past five sessions to about $3.6 billion. A single Wednesday of Rs 10,148 crore is large against a market that was already in its eighth down week. It does not, by itself, explain an 8.7 percent Nifty decline. It does explain why rallies inside that decline have failed. Buyers have been local. The marginal seller has been foreign, and the foreign seller has not paused for the holiday-shortened week.

Oil supplied the other weight. Brent crude moved back above 100 dollars a barrel on Thursday, after easing toward 98 dollars earlier in the session on talk of progress in US-Iran ceasefire contacts. For an importer the difference between 98 and 100 is not symbolic. It feeds the rupee, the current account, and the input bill for paint, plastics, aviation and transport. HDFC Sky noted the reclaim of 100 dollars as a direct addition to the pressure already coming from US yields. The US 10-year had touched 5.34 percent in the same session, a level covered separately. Indian equities were pricing both.

Sector streaks underline how long this has been running. The Nifty PSU Bank index was down for an eighth consecutive week, with Union Bank, Punjab National Bank and Bank of India among the drags. Nifty Energy was down for a fourth week, led by Oil India, ONGC and Jaiprakash Power. Nifty Pharma snapped a three-week gaining run and had its worst week since April, with Wockhardt, Piramal Pharma and Biocon among the names sold. Pharma's break is the exception that shows the selling has spread beyond the oil-sensitive groups. A defensive sector giving back three weeks in one week is not a rotation into safety. It is a reduction of risk across the board.

The levels themselves are the lowest the headlines have had to print in this run. A Nifty close of 22,421.95 and a Sensex close of 71,909.70 put both indices well below the marks they held at the start of August. Eight weeks at this pace would, if repeated, take the Nifty through 20,000. That extrapolation is not a forecast. It is the arithmetic of the streak investors are now using as the bear case. The bull case on the day was thin: a handful of IT and private-bank names in the green, and a morning dip in crude that did not last.

What would stop the streak is visible in the same numbers. A Brent print that stays under 100, a pause in the $3.6 billion five-day foreign sale, or a US yield that retreats from the mid-5 percent handle. None of those arrived by the close on 1 October. The open question for Monday is whether Wednesday's Rs 10,148 crore was a peak day of foreign selling or the start of another five-day run, because the eight-week decline has been a sequence of those runs, not a single shock.