Why Sensex and Nifty Fell: Crude Above $100, the Rate Hike, FPI Selling, and What It Means for Your SIP
The Sensex closed Friday 23 October just 125 points lower, yet the value of BSE-listed companies fell ₹21.06 lakh crore in four sessions and the Nifty Smallcap 100 lost 7.27% in a week. This is what crude above $100, the RBI's rate rise and foreign selling did, what came from inside India, and what NSE's own history says about a SIP in a falling market.
On Friday 23 October the Sensex closed at 73,123.83, down 125.56 points. On a television ticker that looks like a quiet day. It was not. The total value of every company listed on BSE fell by ₹6.85 lakh crore on Friday alone, and by ₹21.06 lakh crore over the four sessions of the week. Midcaps and smallcaps fell for the seventh day running. This piece explains what is behind it: crude oil above $100, the Reserve Bank's rate rise of 7 October, foreign selling, and the causes that came from inside India. Then it looks at what NSE's own history says about carrying on with a SIP in a market like this.
Figures are NSE and BSE closing figures for Friday 23 October 2026 unless a time is given. Flows are NSDL's and the exchanges' own data. This is explanation, not advice, and nothing here is a forecast or a recommendation to buy or sell anything.
73,123.83 — Sensex close on Friday, down 0.17%, after a 1,314-point gap between the day's high and low · ₹21.06 lakh crore — market value lost in four sessions · −7.27% — Nifty Smallcap 100 for the week · 450 of 500 — Nifty 500 shares that fell on Friday · $115.22 — Brent on 20 October, down from $135.51 on 2 October and still far above $100 · 5.50% — the RBI's repo rate after the 7 October rise
1. The calm headline and the fall underneath it
Most people judge the market by two numbers, the Sensex and the Nifty 50. Both are made of the largest companies, and on Friday both closed nearly flat. The Sensex opened at 73,665.64, rose to 73,766.51, fell as low as 72,452.37 and then recovered most of the way. The reports of a "1,100-point fall" describe that swing inside the day. At the close the loss was 125.56 points.
Look one level down and the picture changes. These are NSE's closing figures:
| Index | Close, 23 Oct | Friday | Week | From its peak |
|---|---|---|---|---|
| Nifty 50 | 22,600.00 | −0.39% | −2.36% | −14.2% (26,328.55 on 2 Jan) |
| Nifty Bank | 54,287.35 | −1.16% | −2.79% | −11.8% (61,550.80 on 18 Feb) |
| Nifty Midcap 100 | 55,800.65 | −2.21% | −5.63% | −13.1% (64,224.75 on 31 Aug) |
| Nifty Smallcap 100 | 17,739.45 | −2.94% | −7.27% | −11.9% (20,133.75 on 8 Sept) |
| Nifty IT | 31,995.50 | −0.27% | +0.22% | +15.4% since 8 Oct |
| India VIX | 16.86 | +7.0% | +19.9% | Highest close since 8 June |
The midcap and smallcap indices fell on seven sessions in a row, from 14 to 23 October. On Friday, 450 of the 500 shares in the Nifty 500 fell and only 50 rose. Across everything traded on NSE that day, 3,011 shares fell, 623 rose and 90 were unchanged.
The clearest measure of the damage is market value, which counts every listed company and not just the large ones. BSE publishes it every evening:
| Close of | Value of all BSE-listed companies | Change on the day |
|---|---|---|
| Fri 16 Oct | ₹473.47 lakh crore | — |
| Mon 19 Oct | ₹468.51 lakh crore | −₹4.96 lakh crore |
| Wed 21 Oct | ₹462.38 lakh crore | −₹6.13 lakh crore |
| Thu 22 Oct | ₹459.26 lakh crore | −₹3.12 lakh crore |
| Fri 23 Oct | ₹452.41 lakh crore | −₹6.85 lakh crore |
That is ₹21.06 lakh crore, or 4.45%, in four sessions; Tuesday 20 October was a market holiday. Since the peak of ₹495.23 lakh crore on 26 August, about ₹42.8 lakh crore has gone, roughly 8.6%. The gap between the two measures is the story of the week: the Sensex fell 0.17% on Friday, while all listed companies together lost 1.5%.
2. Why the big indices held up: IT
The Nifty 50 was held up by one sector going the other way. Nifty IT rose 3.02% on 9 October, the day after TCS reported its September-quarter results to the exchanges, then 5.22% on 13 October and 3.92% on 16 October. From 8 to 23 October it gained 15.4%. On Friday, TCS was among the six Nifty shares that rose most, with Eternal, Apollo Hospitals, ONGC, Asian Paints and UltraTech Cement.
Because IT companies carry a large weight in the Nifty and Sensex, their gains offset falls elsewhere. The six biggest Nifty losers on Friday were Shriram Finance (−3.98%), Adani Enterprises (−2.86%), JSW Steel (−2.83%), Jio Financial Services (−2.74%), Tata Steel (−2.70%) and Adani Ports (−2.70%). By sector, Friday's worst were metals (−2.71%), consumer durables (−2.63%), defence (−2.60%), realty (−2.38%), chemicals (−2.32%) and PSU banks (−2.26%).
A headline index is an average weighted by size. When the biggest companies rise and the rest fall, the average hides the fall. Anyone holding a midcap or smallcap fund, or shares outside the top fifty, had a much worse week than the Sensex suggests.
3. Force one: crude above $100
Brent crude, the global benchmark, has been above $100 a barrel for seven weeks. The US Energy Information Administration's daily spot price tells the story:
| Date | Brent spot, $ a barrel |
|---|---|
| 28 Aug | 89.75 |
| 3 Sept | 100.52, the first close above $100 |
| 15 Sept | 130.80 |
| 2 Oct | 135.51, the highest of the year |
| 9 Oct | 130.03 |
| 16 Oct | 119.33 |
| 20 Oct | 115.22, the latest EIA figure |
The rise followed the stand-off over the Strait of Hormuz, which we covered in the global finance week of 21 to 26 September and the Red Monday fall of 28 September. Oil has eased by about $20 from its peak, but at $115 it is still nearly 30% above its late-August level.
Oil hits India through five channels, and they explain why the market keeps marking companies down even on days without new oil headlines:
- The import bill. India buys most of its crude abroad, so every dollar on a barrel is paid in dollars, which puts pressure on the rupee and the current account.
- Inflation. Fuel, freight and plastics feed into almost every price. The RBI cited "sharp volatility in crude oil prices" when it raised rates.
- Company costs. Paint, chemicals, tyres, aviation, plastics and consumer durables use oil-linked inputs. Chemicals fell 2.32% on Friday and 10.5% over thirty days; consumer durables fell 2.63% on the day.
- The government's books. Petrol in Delhi has cost ₹102.12 a litre since 26 May, and diesel ₹95.20 through October, by the Petroleum Planning and Analysis Cell's daily sheet. While pump prices stay put and crude stays high, someone absorbs the gap: the oil marketing companies, the government through lower duty, or both.
- Who gains. Oil producers earn more per barrel. ONGC was one of the few Nifty shares to rise on Friday.
4. Force two: the RBI's rate rise
On 7 October the Reserve Bank's Monetary Policy Committee raised the repo rate by 25 basis points to 5.50%, unanimously, and changed its stance to "calibrated tightening". The standing deposit facility rate is now 5.25% and the marginal standing facility rate 5.75%. The RBI projects inflation of 5.2% and real GDP growth of 7.1% for 2026-27. The next meeting is from 2 to 4 December.
The rise reached borrowers within days. SBI raised its external benchmark lending rate, which most floating home loans follow, to 8.15% from 15 October, from 7.90%. Our home loan EMI calculator shows what that does to an instalment, and this guide explains whether to raise the EMI or extend the tenure.
Higher rates hurt share prices in two ways. First, companies that borrow pay more interest, and smaller companies usually borrow at higher rates than large ones. Second, and less obvious, a share is worth the profits it will earn in future, brought back to today's money. When safe deposits pay more, investors want a higher return from shares too, so they pay less today for the same future profit. That squeeze is strongest where prices assume the most growth. On Friday the Nifty 50 traded at 19.05 times earnings, the Midcap 100 at 25.98 times and the Smallcap 100 at 33.64 times, by NSE's figures. The more expensive the share, the further it can fall when rates rise.
5. Force three: foreign selling, and why it is not this week's story
NSDL records every foreign portfolio investor's trades, reported a day later. Its October figures show heavy selling:
- In data reported from 1 to 12 October, foreign investors sold a net ₹47,417 crore of Indian shares, ₹12,884 crore of it in the single report of 9 October.
- From 13 to 23 October they were close to neutral: net sales of just ₹640 crore, with buying on most of the days that count for this week.
- For October to the 23rd, net equity sales total ₹48,056 crore, or $4.99 billion.
So foreign selling explains the first half of October, around the rate decision, but not this week's slide in smaller companies. On Friday the exchanges' provisional figures show foreign investors as net buyers of ₹887.65 crore and domestic institutions, mainly mutual funds and insurers, as net buyers of ₹3,235.36 crore. The two sources differ because NSDL reports the previous day's settled trades and includes primary-market purchases, while the exchanges report the same day's provisional trades.
Two global forces sit behind the foreign selling. US 10-year Treasury yields rose from 4.19% at the start of 2026 to 5.31% on 5 October, the highest of the year, before easing to 5.00% on 23 October. When a US government bond pays 5% in dollars, money that went to emerging markets for higher returns has less reason to stay. The US Federal Reserve also raised its rate by 25 basis points on 16 September, to a range of 3.75% to 4%, and meets again on 27 and 28 October. Foreign investors were also selling Indian government bonds: ₹3,858 crore net in October through the fully accessible route.
The rupee tells the same story in reverse. NSDL's conversion rate went from ₹96.77 to the dollar on 9 October, at the height of the selling, to ₹94.70 on 23 October. A rupee that is strengthening is not what a market being sold by foreigners usually looks like.
6. What came from inside India
If foreigners were roughly neutral this week, the selling in smaller companies came largely from domestic investors and domestic news. Three things stand out.
Results season. Companies are reporting September-quarter results, and the market is punishing disappointments hard. Swiggy filed its results at 3:45 pm on 22 October; on 23 October its share closed at ₹176, down 16.7% in a day and about 25% from ₹234.30 a week earlier. In an expensive, crowded part of the market, one disappointing result can set off selling across similar shares.
Where the money had gone. AMFI's September data show that small-cap funds took the largest net inflow of any equity category, ₹9,039 crore, followed by mid-cap funds at ₹7,835 crore. A lot of new money had gone into the smaller end of the market just before the fall. Smaller shares also trade less, so when sellers outnumber buyers, prices move further.
Valuations meeting higher rates. As section 4 shows, the smallcap index was priced at more than 33 times earnings. With rates rising, oil expensive and results mixed, that premium is what investors are now questioning.
7. The global picture in one paragraph
Every force in this piece starts with the same thing: the price of money and the price of oil rising together across the world. The Strait of Hormuz pushed crude above $100. Higher oil pushed up inflation expectations, so central banks from the Fed to the RBI raised rates. Higher US yields pulled foreign money out of emerging markets, India included, through early October. What is different this week is that the global pressure eased a little: oil came off its peak, US yields fell back to 5%, the rupee strengthened and foreign investors stopped selling. The damage moved from foreign selling of large companies to domestic selling of small ones.
8. How deep is this fall?
The Nifty 50 is 14.2% below its closing high of 2 January. A fall of 10% is usually called a correction and a fall of 20% a bear market, so the Nifty is in a correction. The Midcap 100 is 13.1% below its peak and the Smallcap 100 11.9% below, but both reached those peaks only in August and September, so their falls are faster.
For context, here are the last three big falls in the Nifty 50, from NSE's index history:
| Fall | Peak close | Lowest close | Fall | First month back above the peak |
|---|---|---|---|---|
| 2008 | 6,287.85 on 8 Jan 2008 | 2,524.20 on 27 Oct 2008 | −59.9% | November 2010, 34 months later |
| 2020 | 12,362.30 on 14 Jan 2020 | 7,610.25 on 23 Mar 2020 | −38.4% | November 2020, 10 months later |
| 2024–25 | 26,216.05 on 26 Sept 2024 | 22,082.65 on 4 Mar 2025 | −15.8% | January 2026, 16 months later |
| Now | 26,328.55 on 2 Jan 2026 | 22,231.80 on 8 Oct 2026, so far | −14.2% at Friday's close | — |
Nothing in the table says where this fall ends. It shows that falls of this size have happened before, that some lasted months and others years, and that the market eventually passed each old peak.
9. What it means for your SIP
Indian investors put a record ₹32,490 crore into SIPs in September, 10.7% more than a year earlier, through 10.06 crore SIP accounts, AMFI's monthly note shows. The value of those SIP assets fell 4.1% in the month, to ₹17.86 lakh crore, because of market losses. So the question many people are asking this week is a practical one.
Where a SIP started this year stands. Take ₹10,000 invested in the Nifty 50 on the first trading day of each month from January to October 2026. That is ₹1,00,000 in, now worth about ₹93,847 at Friday's close: down 6.2%. The same ₹1,00,000 invested in one go on 1 January would be worth about ₹86,436, down 13.6%. The SIP's average buying level is about 24,082 against a January start of 26,146. Buying through the fall softened it, but did not avoid it.
What history shows. We ran the same ₹10,000 monthly SIP through the three earlier falls, starting in the month of each peak, using NSE's Nifty 50 closing values:
| Started at the peak of | Value at the bottom | Carried on | Stopped at the bottom, units kept |
|---|---|---|---|
| 2008, for 5 years | ₹1 lakh put in, worth ₹53,822 (−46.2%) | ₹6 lakh grew to ₹7.56 lakh: 9.2% a year | ₹1 lakh grew to ₹1.27 lakh: 5.3% a year |
| 2020, for 3 years | ₹30,000 put in, worth ₹19,609 (−34.6%) | ₹3.6 lakh grew to ₹4.68 lakh: 17.8% a year | ₹30,000 grew to ₹46,887: 16.5% a year |
| 2024, for 2 years | ₹70,000 put in, worth ₹64,166 (−8.3%) | ₹2.4 lakh was worth ₹2.36 lakh: −1.5% a year | ₹70,000 was worth ₹69,900: −0.1% a year |
The returns use the Nifty 50 price index, which leaves out dividends of roughly 1% to 1.5% a year, and ignore fund costs and tax. "Stopped at the bottom" assumes someone stopped at exactly the lowest month, which nobody can know at the time, so it flatters stopping. Past falls do not predict this one.
The honest reading is that history cuts both ways. In the two deep falls, carrying on through the worst months earned more, because the instalments bought at low prices did the work when the market recovered. In 2024, the market fell again before the SIP had time to recover, so two years later carrying on had not helped. A SIP works through cycles, not inside one.
The case for carrying on. A SIP buys more units when prices are lower: ₹10,000 bought 0.38 Nifty units on 1 January and 0.45 on 1 October. If you stop after a fall, the instalments you skip are the ones bought at the lowest prices. Nobody, including professional fund managers, reliably knows when a fall has ended. And the goals most SIPs are meant for, retirement and a child's education, are many years away.
The case for pausing, or at least reviewing. If you need the money within two or three years, equity was the wrong home for it whatever the market does. If the rate rise has raised your home loan EMI and the SIP now strains your monthly budget, keeping an emergency fund and paying EMIs on time comes first. And if most of your SIPs went into small-cap or sector funds because of their recent returns, this fall is a fair moment to check whether your mix of large, mid and small companies, and of equity and debt, still matches your plan.
These are questions about your own money, timeline and risk, and only you, or an adviser who knows your position, can weigh them. What the numbers rule out is the idea that a fall like this one is unusual. Falls of 10% to 15% have come every few years, and so far each one has been followed by a recovery.
If you are thinking of selling, the capital gains tax calculator shows the tax on a sale, including how a loss is set off. For planning ahead, the retirement calculator tests a corpus against higher inflation.
What to watch next
- 27 and 28 October: the US Federal Reserve's meeting. Another rise would push US yields and the dollar up again.
- Brent crude: whether it stays above $110 or keeps easing. Any news on the Strait of Hormuz moves it fastest.
- Daily FPI flows: NSDL's figures show whether foreign selling returns.
- Results: more September-quarter results through late October and November, especially from midcap and smallcap companies.
- Jio Platforms: allotment on or about Monday 26 October, then listing. Our allotment guide covers both.
- 8 November: Muhurat trading for Diwali.
- 2 to 4 December: the RBI's next policy meeting.
Frequently Asked Questions
Why did the Sensex and Nifty fall this week? Oil above $100, the RBI's rate rise to 5.50% on 7 October and foreign selling earlier in the month made investors pay less for shares, especially expensive ones. This week the selling was concentrated in midcaps and smallcaps, which fell for seven sessions in a row, partly on weak quarterly results such as Swiggy's. Large IT companies rose after TCS's results, which kept the Sensex and Nifty nearly flat.
Why did the Sensex fall only 125 points on Friday if ₹6.85 lakh crore was lost? The Sensex holds only 30 large companies, weighted by size, and IT shares among them rose. The ₹6.85 lakh crore is the fall in the value of all 6,188 companies listed on BSE, most of which are much smaller and fell much more.
Did foreign investors sell this week? Not much. NSDL's data show net sales of ₹47,417 crore in figures reported from 1 to 12 October, then close to neutral. On Friday the exchanges' provisional figures show foreign investors buying a net ₹887.65 crore and domestic institutions buying ₹3,235.36 crore.
How does crude above $100 affect Indian shares? India imports most of its crude, so a higher price raises the import bill, weakens the rupee, adds to inflation and raises costs for companies that use oil-based inputs, such as paint, chemical and airline companies. It also strains the government's finances while petrol and diesel prices are held. Oil producers such as ONGC gain.
Should I stop my SIP? This site does not give investment advice. As arithmetic, a SIP buys more units when prices are lower, and stopping after a fall skips the cheapest instalments. In NSE's history, carrying on through the 2008 and 2020 falls earned more than stopping, while in the two years after the 2024 peak it did not. The decision rests on when you need the money, whether the SIP fits your budget after any EMI rise, and whether your mix of funds still suits your plan.
Is this a bear market? Not by the usual definition. The Nifty 50 is 14.2% below its January high, the Midcap 100 13.1% below its August high and the Smallcap 100 11.9% below its September high. A fall of 10% is conventionally a correction and 20% a bear market.
Fast-moving: prices and flows change daily and provisional data are revised. Market value figures are BSE's end-of-day figures. Educational analysis only, not investment, tax or legal advice.
Sources
The rules and figures in this article can be checked against these official sources.
- Live index values: Nifty 50, sector indices and India VIX National Stock Exchange of India
- Historical index data: Nifty 50, Midcap 100, Smallcap 100, Bank, IT and India VIX, daily closes National Stock Exchange of India
- Advances and declines, all traded shares National Stock Exchange of India
- FII/FPI and DII trading activity, provisional, capital market segment National Stock Exchange of India
- Top gainers and losers, Nifty 50 National Stock Exchange of India
- Tata Consultancy Services: financial results for the period ended 30 September 2026, filed 8 October 2026 National Stock Exchange of India
- Swiggy: financial results for the quarter and half year ended 30 September 2026, filed 22 October 2026 National Stock Exchange of India
- S&P BSE Sensex: open, high, low and close BSE
- All India market capitalisation, historical (daily) BSE
- Foreign portfolio investment: daily and monthly flows NSDL
- Monetary Policy Statement 2026-27: resolution of the Monetary Policy Committee, 5 to 7 October 2026 Reserve Bank of India
- External benchmark based lending rate (EBLR), revised from 15 October 2026 State Bank of India
- Europe Brent spot price FOB, daily US Energy Information Administration
- Daily Treasury yield curve rates US Department of the Treasury
- FOMC statement, 16 September 2026 US Federal Reserve
- FOMC meeting calendar, 2026 US Federal Reserve
- Retail selling price of petrol and diesel in the metro cities (22 October 2026) Petroleum Planning and Analysis Cell
- AMFI Monthly Note, September 2026: SIP contributions, accounts and category flows Association of Mutual Funds in India
- Circular NSE/CMTR/76941, 19 October 2026: Muhurat trading session on account of Diwali (equities) National Stock Exchange of India