If India's benchmark index Nifty50 suffers another monthly decline in February, it will have the longest losing streak in the last 28 years. This would be the first time the index has fallen for five months in a row since 1996, a rare occurrence that has happened only twice in Dalal Street's 34-year history.

Since October 2024, foreign institutional investors (FIIs) have aggressively sold stocks worth over Rs 2 lakh crore, coinciding with the market's ongoing weakness. This is because a weaker rupee reduces the appeal of emerging markets.

Rare and extended correction

Since 1990, the Nifty has experienced only two consecutive monthly declines of five or more. The longest losing streak was from September 1994 to April 1995, when the index fell 31.4% in eight months. The last five-month decline occurred in 1996, when the headline index fell 26% from July to November. The current drawdown, while significant, remains mild in comparison, with an 11.7% drop from October to Friday.

The index is already down 3% this month, with technical analysts predicting a short-term correction to 22,500-22,400 and a sell-on-rise as long as it remains below 22,850.

"The index has been falling since the end of September last year, forming a lower top-lower bottom pattern on the daily chart. This type of formation occurs when the market favors a sell-on-rise strategy, as sellers are willing to offload positions even at lower prices in a weak market environment," Rupak De, Senior Technical Analyst at LKP Securities, explained.