Indian midcaps extend losses as foreign selling keeps broader market under pressure

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Indian midcaps and foreign selling

Broader market losses extend into a third week

According to Moneycontrol, India’s broader market has now declined for a third consecutive week. Nifty Midcap 100 declined close to 2% and Nifty Smallcap 100 was down 0.8% for the week, in contrast to the key benchmark indices.

The Sensex was down 399.22 points, or 0.53%, for the week, closing at 73,895.74, and the Nifty 50 was down 205.9 points or 0.88% at 23,140.5. The rising oil prices, increasing bond yields, geopolitical chaos and sustained foreign capital drain put pressure.

Losses within the midcap segment were considerably steeper for some individual stocks than for the index as a whole. PB Fintech, One 97 Communications, Oracle Financial Services Software, L&T Finance, Container Corporation of India, Adani Total Gas and Tata Investment Corporation fell between 7% and 33% over the week. At the same time, selected stocks including Patanjali Foods, Mankind Pharma and ICICI Lombard gained between 4% and 10%, suggesting that pockets of strength remain even in a weak market.

Foreign selling remains the main source of pressure

Foreign institutional investor activity remains one of the key sources of pressure. FIIs sold about ₹11,490.03 crore worth of Indian equities during the week, extending their net selling streak to five consecutive weeks.

Domestic institutional investors, meanwhile, continued to absorb part of those outflows, buying around ₹16,398.15 crore of equities. Despite that domestic support, the combined market capitalization of BSE-listed companies fell by more than ₹2 lakh crore over the week.

Sector performance was mixed. The Nifty IT index lost 2.4%, Private Bank declined 1.5% and Energy fell about 1%. Realty, by contrast, gained 3%, while Consumer Durables, Pharma and FMCG each advanced by roughly 1%.

Nifty needs to reclaim 23,500 to ease downside pressure

The technical structure of the Nifty remains weak for now. The 23,500–23,600 range is the nearest resistance zone, and selling pressure is likely to persist while the index remains below it.

The psychological 23,000 level is currently acting as the nearest support. At the same time, RSI has formed a short-term bullish divergence, leaving room for a near-term rebound or a period of consolidation. A more meaningful improvement in the technical picture, however, would require a sustained move above 23,600.

Domestic buying limits losses but does not reverse the trend

Strong demand from domestic institutional investors is helping to cushion the impact of foreign selling, but it has not been enough to trigger a broader market reversal. The pressure remains particularly visible in midcaps, where some stocks are correcting far more sharply than the headline indices.

Oil prices, global bond yields and geopolitical developments remain additional sources of risk. Until the Nifty moves back above its nearest resistance zones, the market structure remains vulnerable, while gains in individual stocks are likely to stay more selective.

The prolonged decline in Indian equities is also becoming more noticeable against the more resilient performance of some global markets. Traders Union previously highlighted the unusually long run of weekly losses in Indian stocks, a streak that continued into the latest week.

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