Indian stocks fall to March low as global bond rout pressures RBI

Overview

Updated 1 hour ago

India's Nifty 50 closed at 22,422 on October 1, its weakest finish since late March, after a global bond rout sent the 10-year US Treasury yield to its highest level since 2002. The drop extends the index's losing streak to eight straight weeks, the longest run in 25 years.

The slide has erased roughly $400 billion from Indian market value this year and drawn $27 billion in foreign outflows. It all lands on the Reserve Bank of India, which meets October 5-7 with inflation running above its 4% target and Brent crude near $100 a barrel.

Why it matters

The RBI's October rate decision sets borrowing costs for Indian households and businesses while determining whether the $27 billion foreign exodus slows or accelerates.

Questions about this story

Free account needed to ask — your question is kept and asked for you right after sign-up. Answers are public.

No questions yet — be the first to ask.

Key Indicators

Consecutive weekly Nifty declines

Longest losing run since a nine-week streak in 2001.

$27B

Foreign investor selling of Indian equities in 2026

Overseas funds have pulled money out as US bonds offer higher, safer returns.

5.34%

10-year US Treasury yield

Highest since 2002 after breaking its 2007 peak; the benchmark for global borrowing costs.

14%

Nifty decline year to date

The index sits about 15% below its January high of 26,373; a 20% drop would mark a bear market.

Voices

Curated perspectives — historical figures and your fellow readers.

Ever wondered what historical figures would say about today's headlines?

People Involved

Siddhartha Khemka

Head of research, wealth management, Motilal Oswal Financial Services

Publicly commenting on the selloff

Amol Athawale

Vice president, technical research, Kotak Securities

Mapping support and resistance levels for the Nifty

Organizations Involved

Reserve Bank of India

Central bank

Monetary policy committee meets October 5-7; rate decision pending

India's central bank, whose next rate decision will set the direction for borrowing costs and the rupee.

National Stock Exchange of India

Stock exchange

Operator of the Nifty 50 index

India's largest stock exchange, home to the Nifty 50 benchmark index now in its longest weekly losing streak in 25 years.

Timeline

January 2026 October 2026

5 events Latest: Yesterday

Tap a bar to jump to that date

October 2026
RBI policy meeting convenes
Upcoming Policy

The Reserve Bank of India's monetary policy committee opens a two-day meeting; the rate decision follows October 7.
In 3 days
Nifty closes at late-March low
Latest Market Event

Nifty falls 0.9% to 22,422, its weakest finish since March 30, capping an eighth straight weekly decline as the 10-year US yield hits 5.34%.
Yesterday
September 2026
September outflow hits Rs 44,013 crore
Capital Flows

Foreign selling accelerates; the 10-year Treasury posts its biggest quarterly rise this century.
2 days ago
August 2026
Foreign selling picks up
Capital Flows

Overseas funds net sell Rs 7,532 crore of Indian stocks in August as Treasury yields climb.
August 31st, 2026
January 2026
Nifty peaks at record high
Market Event

The index touches an all-time high of 26,373 during January before the long slide begins.
January 31st, 2026

Scenarios

RBI raises repo rate to 5.50%

Likely Resolves by Oct 7, 2026

Discussed by: Reuters poll of economists: 35 of 61 expect a 25-basis-point hike

With inflation at 4.82%, crude near $100 and US yields surging, the RBI hikes for the first time since 2023. The move lifts borrowing costs for homes, vehicles, and businesses, which is why autos, consumer durables, and realty have sold off hardest in anticipation. A hike could steady the rupee and slow foreign outflows.

RBI holds rates at 5.25%

Possible Resolves by Oct 7, 2026

Discussed by: Minority of economists in Reuters poll; market participants watching the rupee

The RBI keeps rates unchanged, betting inflation will cool and the global bond surge will fade. The risk: the rupee keeps sliding toward 96 per dollar, imported inflation rises, and foreign investors keep pulling money out. Analysts expect markets to price in a hike at a later meeting.

Nifty enters bear market by year-end

Possible Resolves by End of 2026

Discussed by: Technical analysts at Kotak Securities and SBI Securities

If the selloff continues, the Nifty falls to 21,098, a 20% drop from its January peak of 26,373. Technical analysts point to 22,200 as the next support; a break below that could accelerate losses toward 22,000 and lower. The trigger would be a hawkish RBI tone, further US yield gains, or crude moving above $100.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

March 2020

COVID crash and rebound (March 2020)

Indian stocks fell for seven straight weeks during the initial COVID-19 shutdowns before the streak ended. That run had been the index's longest losing spell in decades.

Then

The selloff was followed by a sharp rebound once central banks flooded markets with liquidity.

Now

The current eight-week decline has surpassed that streak, though the drop's magnitude, around 9%, is far smaller than the COVID rout's 25%-plus.

Why this matters now

It shows how quickly Indian markets can reverse course when liquidity conditions change, but also that this selloff is driven by tightening, not panic.

2001