The Nifty 50 fell 5.67 per cent in September 2026, its worst September performance since 2018, when the benchmark declined 6.42 per cent. The index closed the month at 22,716.20, down from 24,080.40 at the end of August. Notably, the Nifty 50 is down nearly 14 per cent from its 52-week high of 26,373.20.
The September decline marks a sharp reversal from the previous two years. The Nifty had gained 2 per cent in September 2023, 2.28 per cent in September 2024 and 0.75 per cent in September 2025. In fact, barring September 2022, when the index fell 3.74 per cent, the benchmark had posted positive returns in September in each of the previous three years, data compiled by BS research showed.
The broader weakness was visible across the index constituents, with 40 of the 50 Nifty stocks ending September in the red. Only eight stocks gained, while two were nearly unchanged, data from Ace Equities suggested.
Vinit Bolinjkar, head of research at Ventura, noted that September’s sharp sell-off feels eerily similar to the liquidity freeze seen back in September 2018, though the drivers today are quite different.
Bolinjkar attributed the current sell-off to ‘stubbornly’ high US bond yields, a strong dollar, and foreign institutional selling due to capital rotating out of Indian markets into cheaper regional alternatives and risk-free dollar assets. He noted that the ongoing West Asia crisis’ subsequent impact on crude oil prices added to the market sell-off.
“Domestically, the market had been priced for perfection, but recent slowdowns in high-frequency economic indicators like auto sales and railway freight have forced a harsh reality check on corporate earnings. When you add in the sheer amount of liquidity being drained by a massive IPO pipeline and tighter regulatory curbs on retail speculative trading, the secondary market simply ran out of fuel to sustain its record highs,” he said.
Notably, Information technology stocks were among the worst performers during the month. Tata Consultancy Services fell 13.70 per cent, the steepest decline among the Nifty 50 constituents in the data, followed by Bajaj Finserv, down 13.31 per cent, Wipro down 12.43 per cent, Shriram Finance down 12.04 per cent, Infosys fell 11.52 per cent and Maruti Suzuki down 11.36 per cent.
Ashwini Shami, president, chief portfolio manager at OmniScience Capital noted that IT sector is currently facing fundamental challenges in revenue and earnings growth.
“IT is grappling with the AI-led transformation and the need to reinvent its growth business model. The corrections are a result of valuations that were steep relative to the growth the sector was delivering. The tipping point will come when valuations reach levels that are justified for single-digit growth rates,” Shami added.
Meanwhile, the gains were concentrated in a small group of stocks. Adani Ports was the standout performer, rising 9.45 per cent during the month. Dr Reddy’s Laboratories gained 5.77 per cent, while Coal India rose 5.16 per cent.
ITC gained 3.80 per cent, while HDFC Bank rose 1.42 per cent. Tata Steel, Eternal and Power Grid also ended higher, gaining 1.06 per cent, 0.87 per cent and marginally, respectively.
Sunny Agrawal, head of fundamental research at SBI Securities, said that the current sell-off is significant more for its breadth and the number of simultaneous macro headwinds than simply for the percentage decline in the headline indices.
“Going into the October–December quarter, investors should watch crude oil prices, US bond yields, FPI flows, the rupee, corporate earnings revisions and market breadth. For IT specifically, commentary on discretionary technology spending and deal conversion will be important, while for FMCG, festive-season volumes and consumption trends will be key,” he added.
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