D-Street stocks are breaking long-held supports as selloff deepens

Indian equities are breaking through a series of long-held technical support levels as a selloff gathers pace in a market once considered an emerging-market darling.

The benchmark NSE Nifty 50 Index has fallen for seven straight weeks, wiping out nearly $250 billion in market value, and broken through its 200-day moving average on a weekly basis for the first time in six years.

The rout has been driven by a convergence of pressures rather than a single trigger.


India’s reliance on oil imports means rising prices threaten to fan inflation and cloud its growth outlook. A relentless rally in global bond yields is making local shares less attractive, prompting foreign investors to pull out even more money. The lack of meaningful artificial intelligence plays has further diminished the appeal of Indian equities among global money managers.

Here are three charts that highlight the turbulence witnessed by Indian stocks:

On Tuesday, the Nifty 50 Index fell below its 200-day moving average on a weekly basis for the first time since March 2020. The 30-stock BSE Sensex breached the same support level last week.

The index is down 2.3% this week and is on track for an eighth straight weekly decline, which would mark its longest losing streak since the end of the ‘dot com’ bubble era.

The selloff comes despite the stocks trading at their cheapest relative to earnings estimates since 2020. That marks a sharp change from recent years, when strong economic growth, earnings expansion and relentless domestic inflows helped establish India as one of the most favored structural trades in emerging markets.

A weakening rupee is also adding to the pressure by eroding dollar returns and fueling selling from global funds, which have withdrawn close to $26 billion from Indian stocks this year.