Sensex, Nifty crash wipes off Rs 30 lakh crore from Dalal Street in less than 6 weeks. What can trigger a rebound?

The Indian stock market has recently witnessed a sharp selloff, with soaring oil prices, skyrocketing bond yields and RBI’s hawkish tone pushing both benchmark indices Sensex and Nifty to fresh 52-week lows this month. Analysts expect a rebound to be driven by a combination of several factors, although technical charts warrant caution.

The Nifty 50 hit its lowest level since April 2025 on Thursday, sinking to 22,179. Dalal Street’s sharp sell-off wiped out more than Rs 10 lakh crore from the total market capitalisation of companies listed on the BSE in just one day, taking it to around Rs 460 lakh crore.

Since early September, the selloff has erased nearly Rs 30 lakh crore from the total market capitalisation of all BSE-listed companies to Thursday’s level, which marks the lowest since June. Amid this bloodbath, the question now remains what will trigger a market rebound.


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What will bring the bulls back to Dalal Street?

The return of the bulls will depend less on one trigger and more on a reversal of the current macro headwinds, said Ajit Mishra, SVP of Research at Religare Broking. He noted that a sustained cooling in crude oil prices and West Asian tensions, moderation in US bond yields and a stabilising rupee would improve risk appetite. Equally important would be a slowdown in FII selling, alongside continued DII support.

This comes as foreign investors have been massively selling Indian equities, with the selloff intensifying from the second half of September onwards. Latest fortnightly data from NSDL show FIIs net sold Indian equities worth Rs 35,861 crore across sectors during last month.

Domestically, stronger-than-expected Q2 earnings, resilient consumption and improving earnings visibility can provide fundamental support, Mishra from Religare Broking added. “The recent sharp correction has also improved valuations, but technically the market needs to build a durable base before a sustained rebound can take shape.”

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Technical charts indicate further downturn

From a technical perspective, the trend however remains firmly bearish, as Nifty has slipped below all key moving averages, Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities pointed out. “Momentum indicators also continue to indicate weakness, while the daily RSI remains in the super bearish zone as per the RSI range shift framework. Therefore, the index is likely to remain under pressure and continue its downward trajectory in the near term,” the analyst said.

Going ahead, the zone of 22,350-22,400 is likely to act as an immediate hurdle for the index on the upside, according to the analyst. He warned that as long as Nifty remains below the 22,400 mark, the prevailing bearish trend is expected to continue. In the short term, the index may extend its decline towards 22,100, with the next key support placed around 21,950, he said. “A sustained move above 22,400 will be required to ease the immediate downside pressure and improve the short-term outlook.”

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Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.