Indian Stock Market Faces a Difficult September

India’s benchmark stock indices ended September 2026 with a sharp decline, as rising oil prices, higher global interest rates and continued foreign investor selling weighed on market sentiment.

The Nifty 50 fell about 5.7% during September, while the Sensex also declined around 5.7%, marking the market’s steepest monthly fall since March. The Nifty’s September performance was its weakest for the month since 2018.

One of the major concerns was the rise in crude oil prices. Since India imports a large share of its crude oil, expensive oil can increase inflationary pressure and put pressure on the rupee. Higher US Treasury yields and tighter global monetary conditions also made emerging-market assets relatively less attractive to foreign investors.

Foreign portfolio investors sold around $2.7 billion worth of Indian equities in September, taking their total outflows for 2026 to about $26.8 billion.

The decline was broad-based, with several major IT stocks among the weaker performers during the month. At the same time, some companies, including Adani Ports and Dr Reddy’s Laboratories, gained during September.

Going into October, investors are likely to watch crude oil prices, global bond yields, foreign fund flows, the rupee and corporate earnings closely.