Why Is the Market Falling? And Where It Could Go Next

By /

Market View | Data as of 9 October 2026 close

Ten weeks ago the Nifty closed at 24,774. Since then it has lost over 2,250 points, and the RBI has raised rates. Friday’s bounce is welcome, but it is not a recovery yet. This is not an earnings crisis. It is a “price of money” crisis.

−2,254 ptsNifty from 24,774 peak close (3 Aug) to 22,520
5.50%RBI repo rate, first hike since 2023
5.3%+US 10-year yield, highest since 2002
₹1.57 L crMargin (MTF) book, near record

The real story

1. Safe money pays more than ever. A risk-free US bond pays over 5.3% in dollars, about what Indian large caps offer a foreign investor, without the currency risk.

2. A loop that feeds itself. Brent is still above $100 and the rupee hit a fresh low near 96.7.

Crude risesOil bill growsRupee weakensDollar returns fallForeigners sell

3. The RBI chose the rupee over growth. Repo up to 5.50% on 7 Oct. Rate cuts are off the table for now.

4. The tug of war. Domestic SIP and fund money is why this has been a grind, not a crash. This week:

Foreign investors sold₹30,300 cr
Domestic institutions bought₹30,300 cr

5. The leverage has not been flushed. Margin-funded positions (MTF) are near a record ₹1.57 lakh crore and fell only ₹763 crore last week, even as the Nifty hit a 52-week low. If prices slide, margin calls force square-offs, which push prices lower and trigger more calls. That is how a fall becomes a free fall.

Nifty price map Market structure, not price targets

Nifty price map A number line from 19,300 to 25,000. The Nifty is at 22,520, inside a box from 22,200 to 22,750. Above is the old floor at 23,300 to 23,500 and the peak close of 24,774. Below 22,000 is an air pocket down to 20,000, with only the June 2024 and April 2025 panic lows at 21,300 and 21,700. The next base built over months is 19,500 to 20,000. NOW 22,520 AIR POCKET: THIN SUPPORT REAL BASE CEILING PEAK 22,000 last line 19,500–20,000 21,300 21,700 22,200–22,750 23,300–23,500 24,774 2023 base, built over months Jun ’24 low Apr ’25 low the box old floor close, 3 Aug

1. Dead cat bounce

If the bounce stalls below 22,750

A quick rally that fades, then another test of 22,200.

2. Relief rally of ~1,000 points

If 22,750 breaks

Room to run into the 23,300–23,500 ceiling. It becomes a real recovery only if the next dip holds above 22,750.

3. Free-fall risk

If the Nifty closes below 22,000

The 2024 and 2025 lows were one-day panics with little buying built up. The next real base is 19,500–20,000, about 20% below the peak. Margin calls could speed the fall.

Recovery scorecard

1/5signals on
NO
FII selling slows₹30,300 cr sold
NO
Rupee stops fallingFresh low ~96.7
NO
Banks leadIT led Friday
NO
Close above 22,750At 22,520
YES
Fear falls as prices riseVIX −6% Friday

Markets don’t bottom on good news. They bottom when bad news stops hurting. Friday was the first hint. One hint is not a trend.

Kerdoss Trade India | SEBI Registered Research Analyst | Reg. No. INH000020730 | BSE Enlistment No. 6560 | www.kerdoss.com

For educational purposes only. This is a general market view, not a recommendation to buy, sell or hold any security, index or derivative. Levels and scenarios describe market structure and are not targets, forecasts or trade calls. MTF data as of 8 Oct 2026.

Registration granted by SEBI, enlistment with RAASB and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.

Disclosure: Kerdoss Trade India and its partners do not hold any position in the Nifty 50 index or its derivatives as on the date of this publication.

Scroll to Top