Market Set for Volatile Week as FII Selling, Rising Bond Yields Weigh
Indian equity indices extended losses for a fourth consecutive session as foreign institutional investors stepped up selling, while surging bond yields and elevated crude oil prices weighed on market sentiment. The Sensex dropped around 571 points to close at 71,910, while Nifty 50 fell nearly 199 points to end at 22,422, after both indices plunged more than 1.5% earlier in the day before recovering some losses late afternoon. The extended selloff wiped off Rs 5 lakh crore from the total market capitalisation of all companies listed on BSE, dragging it below Rs 467 lakh crore.
Analysts attributed the market decline to external headwinds, with bond yields reaching multi-year highs and crude oil prices remaining elevated, raising concerns about the economic outlook for 2026-27. Domestically, investors remained cautious ahead of Q2 results and the upcoming RBI policy next week, as Q2 earnings are expected to be softer than Q1. Despite these pressures, Geojit Investments' head of research noted that India's economy remains resilient and well-positioned to navigate current challenges.
Long-term investors are being advised to use market weakness for gradual accumulation, while short-term investors could adopt a wait-and-watch approach. The market outlook hinges on stronger measures from international institutions and governments to restore stability in global financial markets, with analysts cautioning about the volatile environment ahead.
