Nifty logs longest weekly losing run since 2020 crash. Here’s how

India’s benchmark indices, the Nifty 50 and Sensex, logged their sixth straight weekly loss, marking their longest losing streak since the COVID-19 crash of April 2020, as both fell nearly 5% since end-June, weighed down by U.S. tariff hikes, weak earnings, and relentless foreign investor outflows that triggered a broad-based selloff.

On Friday, the Nifty 50 fell 0.95% to 24,363.30, while the Sensex declined 0.95% to close at 79,857.79. For the week, they shed 0.8% and 0.9%, respectively. The continued decline reflects persistent selling pressure across sectors, with little sign of relief amid deteriorating global trade relations and muted domestic performance.

Tariff shock hits exporters

Export-oriented stocks led the rout after U.S. President Donald Trump announced a sharp escalation in trade tensions, doubling tariffs on Indian exports to 50%. The move, retaliation for India’s continued oil trade with Russia, delivered a fresh blow to investor confidence.

Morgan Stanley warned the Indian seafood export industry alone could face a potential loss of Rs 24,000 crore. “Indian textile and apparel exporters are halting US order manufacturing due to President Trump’s tariff doubling to 50%, severely impacting their competitiveness against nations like Bangladesh and Vietnam,” the brokerage said, forecasting “export decline, job losses, and overall uncertainty in the sector.”

Beyond textiles and seafood, exporters in gems and jewellery, chemicals, and auto ancillaries are now grappling with halted orders and squeezed margins.

FIIs dump Indian stocks

The selloff intensified as foreign institutional investors (FIIs) remained net sellers for the tenth straight session. On August 7 alone, FIIs pulled Rs 4,997.19 crore from Indian equities, taking August’s total outflows to over Rs 15,950 crore. Since July, the exodus has crossed $4 billion.“FIIs have sold on all trading days of August, so far,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “These weak indicators, along with the relatively high valuations in India, are triggering sustained selling by the FIIs.”Vijayakumar said, “In the present context of negative sentiments in the market caused by the tariff skirmishes between India and the U.S., FIIs are likely to continue selling in the cash market.” However, he noted that “the only saving grace is the sustained DII buying which remains strong. The strong DII buying assisted by sustained flows into mutual funds can prevent a crash in the market.”

Technical indicators point to more weakness

Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, noted that the Nifty has formed a bearish candle with a long upper shadow for four consecutive weeks—“signaling that every attempt at a rally is being met with strong selling pressure, indicating a lack of conviction among bulls and a clear dominance of bears at higher levels.”

Shah said that the Nifty is now trading below its 20-day, 50-day, and 100-day EMAs, all sloping downward, and its RSI has entered a “super bearish zone.” He said the MACD indicator also remains in bearish territory, with the MACD line below both the signal and zero lines.

“Crucial support lies in the 24,200–24,150 zone, where the 200-day EMA and 38.2% Fibonacci retracement levels coincide,” Shah said. “If the index slips below 24,150, it could extend its decline to 23,750. On the upside, the 100-day EMA zone of 24,570–24,600 will act as a crucial hurdle.”

Banking sector offers little respite

The banking index mirrored broader market weakness. “The banking benchmark index Bank Nifty also ended the week on a negative note… On the weekly chart, it formed a bearish candle, indicating persistent selling pressure,” Shah said.

The index hovered near its 100-day EMA, with support seen at 54,950–54,850. “A sustained move below 54,850 could intensify the downtrend toward 54,000–53,900,” he warned. Resistance on the upside stands at 55,700–55,800.

Muted Q1 earnings add to gloom

Corporate earnings offered little cover. The Nifty IT index is down 10% over the past month, and the banking sector has shown little momentum. An Economic Times analysis revealed that India’s top nine private banks posted only 2.7% year-on-year profit growth in Q1, reflecting weak credit appetite and sluggish macro momentum.

“There are no indications yet of a sharp uptick in earnings for FY26,” Vijayakumar said, adding that the market remains both “technically and fundamentally weak.”

With foreign selling unrelenting, global macro risks mounting, and Q1 results underwhelming, investors may need to brace for continued volatility. Unless trade tensions ease or earnings deliver a surprise turnaround, the path ahead for Indian equities remains fraught with risk.

Also read | Why the stock market fell today: Trump’s 50% tariffs on India among 5 factors behind Sensex’s slide of 765 pts, Nifty dips below 24,400(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)