Sensex and Nifty drop over 1% as foreign funds exit, extending downtrend to the fifth day

Indian Stock Markets Extend Losses for Fifth Straight Session Amid Foreign Fund Exodus

Indian equities continued their downward spiral for the fifth consecutive trading day on Thursday, with both benchmark indices shedding more than 1% of their value as foreign investors accelerated their withdrawal from domestic markets. The sustained selling pressure, fueled by global economic uncertainties and surging US bond yields, created a wave of nervousness across trading floors, particularly hitting banking, IT, and metal stocks hard.  

The BSE Sensex tumbled 793 points to close at 65,226, while the Nifty 50 dropped 234 points to settle at 19,428. Heavyweights like HDFC Bank, Infosys, and Reliance Industries led the decline, reflecting the broad-based nature of the sell-off. Market veterans pointed to the relentless outflow of foreign funds as the primary culprit, with overseas investors pulling out over ₹8,500 crore from Indian shares in just five days.  

The flight of foreign capital comes amid shifting global dynamics, where the US 10-year Treasury yield's climb to 4.8% - its highest level since 2007 - has made safer assets far more appealing than emerging market risks. Adding to the unease are lingering concerns about slowing worldwide economic growth and escalating tensions in the Middle East, creating a perfect storm for risk-averse investors.  

Domestic institutional investors attempted to cushion the blow by pumping in ₹5,200 crore during the same period, but their efforts couldn't fully offset the foreign exodus. Retail investors, meanwhile, adopted a wait-and-watch approach, with many small traders hesitating to make significant moves in such volatile conditions.  

Sectoral performance told a grim tale, with banking stocks taking the hardest hit as the Nifty Bank index plunged 1.5%. IT shares remained under pressure amid fears of shrinking global technology budgets, while auto and FMCG counters showed modest resilience but failed to lift overall market sentiment.  

Market experts remain divided on the immediate outlook. Some see the current slump as a temporary correction in India's otherwise strong growth narrative, while others warn of continued turbulence until global macroeconomic conditions stabilize. All eyes are now on the upcoming corporate earnings season and the RBI's next policy meeting for potential market-moving cues.  

For long-term investors, this downturn may present selective buying opportunities in fundamentally sound stocks. But for now, the prevailing mood on Dalal Street remains one of cautious apprehension, with traders bracing for more volatility until clearer signals emerge from both domestic and international fronts.