Sensex Posts Worst Month Since March, Falls 5.8%

The Sensex ended September 5.8% lower at 72,480.29 and the Nifty 50 fell 6.1% to 22,620.45, marking India’s worst monthly performance since March and a second straight monthly decline. The Sensex month-end slide was driven by rising oil prices, foreign fund outflows and a global shift towards higher interest rates.

On September 30, the last trading day of the month, the Sensex closed 48.78 points (0.07%) lower while the Nifty 50 slipped 95.75 points (0.42%), according to market reports. The rupee finished at about ₹95.97 against the US dollar, Brent crude traded near $103 a barrel, and the 10-year government bond yield stood around 7.15%.

Why Did the Sensex and Nifty Fall So Sharply in September?

Reuters-sourced market reports attribute the slide to a mix of higher crude prices, inflation worries and a hawkish turn among global central banks. The US Federal Reserve raised rates in September, while central banks in Australia, Europe and Japan also tightened. That lifted global bond yields and made emerging-market equities less attractive.

Foreign investors pulled out about $2.7 billion from Indian equities in September, taking year-to-date foreign outflows to roughly $26.8 billion. The rupee weakened 0.7% in September and about 1.2% over the quarter, while benchmark 10-year bonds fell for a third consecutive month.

Which Sectors Took the Biggest Hit?

The Nifty IT index dropped 11.2% in September, the sharpest fall among major sectors, as higher US rates weigh on technology spending and valuations. Auto stocks lost 8.8%, ending a five-month rally, while financial services declined 6.3%. Mid-caps lost 7.6% and small-caps shed 3.4%. Coal India was a notable outlier, gaining 5.8%, while HDFC Bank was broadly flat after recent losses.

What Do Analysts Say About October?

Market analysts expect limited downside risk from current levels but caution that any recovery will stay constrained by West Asia tensions and will depend on corporate earnings. One analyst quoted in Business Standard’s market close report advised investors to focus less on short-term index volatility and more on earnings visibility, domestic liquidity and sectors with stronger pricing power.

Market and Trade Reaction

On the last day of the month, banking and realty shares outperformed, with Prestige Estates, Brigade Enterprises and DLF among the gainers. The Nifty Media index led sectoral gains, with Sun TV jumping as much as 20% intraday, its best single-day performance in nine years. Nifty MidCap 100 ended 0.02% higher and Nifty SmallCap 100 gained 0.27%.

What Happens Next for Indian Markets?

Investors will watch the Reserve Bank of India’s Monetary Policy Committee meeting in early October, crude oil prices and the direction of foreign flows. Any further rise in US yields or a flare-up in the Strait of Hormuz situation could keep pressure on the rupee and equities, while a de-escalation in West Asia could ease oil and support a rebound.

Frequently Asked Questions

How much did the Sensex fall in September 2026?

The BSE Sensex declined 5.8% in September to close at 72,480.29. The Nifty 50 fell 6.1% to 22,620.45, the worst monthly showing since March.

Why are foreign investors selling Indian shares?

Foreign portfolio investors sold about $2.7 billion in September as oil prices, global rate hikes and a weaker rupee reduced the appeal of emerging-market assets. Year-to-date outflows total about $26.8 billion.

Which sectors fell the most in September?

IT stocks fell the most at 11.2%, followed by autos at 8.8%, financial services at 6.3% and mid-caps at 7.6%. Coal India bucked the trend with a 5.8% gain.