Stock market closing: Sensex, Nifty end lower; Sept losses mount on FII selling, oil
Crude oil above USD 105 per barrel, high US yields, rupee weakness, and foreign fund outflows keep pressure on Indian equities despite a sharp late-session recovery
Indian equity benchmarks ended lower on Tuesday (September 29), as elevated crude oil prices, rising US bond yields, continued foreign fund outflows, and geopolitical tensions weighed on investor sentiment. The indices, however, recovered sharply from their intraday lows in a volatile session.
The BSE Sensex closed at 72,529.07, down 242.65 points (0.33 per cent), while the Nifty 50 ended at 22,716.20, lower by 64.05 points (0.28 per cent). The Nifty recovered substantially after falling sharply during the session and managed to hold above the 22,700 mark.
The September sell-off has nevertheless been significant. The Nifty closed at 24,080.40 on August 31 and at 22,716.20 on September 29, translating into a decline of about 5.7 per cent so far in the month.
September sell-off in historical context
The September decline comes after a period of sustained weakness in Indian equities. The Nifty has also recorded seven consecutive weekly declines, its longest losing run since the Covid-19 market sell-off in 2020.
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The historical comparison remains notable. The Nifty's September 2020 decline was around 6.4 per cent, while September 2001 saw a much steeper fall of about 16 per cent. However, with the Nifty down about 5.7 per cent through September 29, it would be premature to describe September 2026 as the worst September in 25 years. The month has one trading session remaining.
Broader markets also remained under pressure. The Nifty Midcap 100 fell around 1 per cent, while the Smallcap 100 declined about 0.8 per cent. Reuters reported that 13 of 16 major sectoral indices ended lower.
IT, insurance stocks remain weak
Information technology stocks remained under pressure, while banking stocks also declined. Most Tata Group stocks ended lower amid continuing uncertainty surrounding Tata Sons and Tata Trusts.
Insurance counters remained particularly weak after recent concerns over proposed changes to insurance commission structures. PB Fintech has seen heavy selling in recent sessions.
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On the positive side, pharma and metal stocks offered some support. BSE gained in the final hour ahead of its inclusion in the Nifty 50, replacing Wipro from September 30.
Crude, bond yields, rupee weigh on sentiment
Crude oil remained a key concern for investors, with Brent trading around USD 105-USD 106 a barrel amid continuing geopolitical tensions in West Asia. Higher oil prices raise concerns over India's import bill, inflation, and corporate margins.
US Treasury yields also remained elevated, with the 10-year yield rising above 5.27 per cent, according to Reuters, adding to pressure on emerging-market assets.
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The rupee also remained under pressure, trading around the Rs 96-per-dollar level. The combination of a weaker currency, expensive crude, and high global yields has added to the market's macro concerns.
FII selling remains a major headwind
Foreign institutional investors have continued to withdraw money from Indian equities. Reuters reported that foreign investors had sold more than USD 2.17 billion of Indian equities in September by Tuesday.
The market is now heading into the final session of September with investors watching crude oil prices, US bond yields, foreign fund flows, the rupee, and developments in West Asia.
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Tuesday's sharp recovery from the day's lows provided some relief, but the broader trend remained volatile, with the Nifty still significantly below its levels at the start of the month.
