Foreign portfolio investors (FPI) dumped local stocks for a fourth straight day on Friday, causing the bellwether Nifty 50 and Sensex indices to log their biggest weekly fall in 30 months. This and heavy selling by retail clients caused investor wealth to plunge by ₹8.75 trillion overnight.

The Nifty and Sensex fell by 1.5% each to 23,587.5 and 78,041.59 points on Friday as FPIs net sold shares worth a provisional ₹3,597.82 crore, which offset the net purchase of ₹1,374.37 crore by domestic institutional investors.

The rupee also tested a new low on Friday before recovering to close higher following the Reserve Bank of India’s intervention.

With Friday’s fall, both the Nifty and Sensex have tumbled below their crucial 200-day simple moving averages (SMA), which underscores the bearish trend amid a rising dollar and US bond yields. 

At its last policy meeting for the year on Tuesday and Wednesday, the US' Federal Open Markets Committee (FOMC) projected two rate cuts for next year, down from four earlier, amid rising inflation expectations and souring investor sentiment globally, as rising bond yields and a stronger dollar cause FPIs to sell emerging market stocks in favour of low-risk US bonds. 

The 200-day SMA measures the average levels that the Nifty and Sensex have traded at for the past 200 days. The 200 SMA for Nifty lies at 23,834 and for the Sensex at 78,320.76, per Bloomberg.