Mumbai’s stock benchmarks have taken a significant hit since the start of 2026, shedding over 4 percent amid relentless foreign investor outflows. Foreign Portfolio Investors (FPIs) have offloaded shares worth approximately Rs 36,500 crore, intensifying the downward spiral.
This week’s trading session painted a grim picture, with the Nifty 50 plunging 2.51 percent to close at 25,048, while the Sensex tumbled 2.43 percent, ending at 81,537 on the final day after a 769-point drop. Every sectoral index closed in the red, led by a brutal 11.33 percent crash in realty stocks. Consumer durables, telecom, and discretionary sectors also suffered losses exceeding 5 percent.
Small and midcap stocks bore the brunt, with Nifty Midcap 100 down 4.58 percent and Nifty Smallcap 100 slumping 5.81 percent. Bank Nifty breached a crucial support level at 58,800, signaling deeper troubles ahead.
Profit booking triggered the initial slide, but sustained FPI selling and global jitters over U.S. tariff policies fueled the rout. Geopolitical tensions, including stern U.S. statements on Greenland and tariffs, rattled worldwide markets. Rising global bond yields and uncertainty from U.S. Supreme Court reviews of tariff cases further curbed risk appetite.
Early-week optimism from solid IT and banking quarterly results faded quickly as disappointing earnings from other firms soured sentiment. The Indian rupee weakened to near 92 per dollar, raising fears of costlier imports and inflation.
Investors are now pinning hopes on the upcoming Union Budget 2026 and signals from the U.S. Federal Reserve on interest rates. Experts suggest a short-term rally might emerge pre-budget due to existing short positions among foreign investors. However, lasting recovery hinges on improved global conditions, robust corporate earnings, and reassuring budget measures.