Sensex declines 550 pts, Nifty below 24,900: Persistent FII outflows among key factors behind market fall

Sensex, Nifty see profit booking in September 25 trade. 

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26 Aug, 2025 12:21

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The equity benchmark indices came under selling pressure on Thursday, extending losses for the fifth straight session, as persistent foreign fund outflows and concerns over higher US visa fees weighed on investor sentiment. This was the longest losing streak for the markets in six months.

Sensex tanked 555.95 points or 0.68 percent to settle at 81,159.68. During the day, it dropped 622.74 points or 0.76 percent to 81,092.89. The Nifty tumbled 166.05 points or 0.66 percent to 24,890.85.

Tata Motors, Trent, Asian Paints, Dr. Reddy's Laboratories and Titan were among the key laggards in the Nifty pack, declining up to 3 percent.

1) Persistent FII outflows: Foreign Institutional Investors (FIIs) sold equities worth Rs 2,425.75 crore on Wednesday, after offloading shares worth Rs 3,551.19 crore on Tuesday. Continued selling by FIIs has remained a key factor behind the market weakness.

"The significant drag on the market throughout this year has been the sustained selling by FIIs. The reforms being implemented in India, along with the low interest rate regime, have the potential to push economic growth and corporate earnings growth higher. This should bring FIIs back to the Indian market," VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said.

2) US visa concerns: The IT index dropped 0.2 percent, extending its decline to 5.13 percent since September 19. The fall intensified after the US introduced a fee of Rs 88 lakh for new H-1B visa applications from September 22. According to Reuters report, the U.S. lawmakers are scrutinizing large technology companies including Amazon and Apple over their use of H-1B visas even as they lay off other workers, the Wall Street Journal reported on Thursday.

"With Trump’s steep tariffs and the new USD 1,00,000 H-1B visa fee weighing on sentiment, Nifty faces strong resistance at 25,300," said Prashanth Tapse, Senior Vice-President (Research), Mehta Equities Ltd.

3) Global cues: Weak global cues also dampened investor confidence. Key Asian indices, including South Korea’s Kospi, traded lower, while US markets ended in the red on Wednesday.

4) Higher crude: Crude oil prices eased in Asian trade on Thursday after climbing 2.5 percent in the previous session to their highest level since August 1. The rise was triggered by a surprise drawdown in US inventories and supply concerns following Ukraine’s attacks on Russia’s energy infrastructure. Although prices retreated today, they remain elevated. Higher crude prices typically weigh on Indian equities by raising inflationary pressures and increasing input costs for companies.

"Though 25,000 has once again held as a support, attempts to move higher failed to gain traction beyond the 25,278-25,330 zone, which we had identified as a potential upside marker. The 24,880-24,800 trajectory continues to remain in play," said Anand James, Chief Market Strategist, Geojit Financial Services.