Nifty 50 Set to Log Worst September Performance in 8 Years as Index Slumps 5.67%

The benchmark Nifty 50 is on course to record its worst September performance in eight years, as persistent foreign institutional selling, elevated crude oil prices, and hardening global bond yields triggered an intense sell-off across domestic equities.

Through September 29, the index dropped 5.67% during the month, closing at 22,716.20 compared with 24,080.40 at the end of August. This marks the steepest September loss for the 50-share gauge since 2018, when it shed 6.42% during a severe liquidity squeeze. The benchmark now trades nearly 14% below its 52-week peak of 26,373.20.

Sharp Reversal in Seasonality

The September downturn represents a sharp break from the positive seasonal momentum observed in recent years. Historical data shows that the Nifty 50 delivered gains in three of the preceding four years during September:

• September 2023: +2.00%
• September 2024: +2.28%
• September 2025: +0.75%

Barring September 2022, when the gauge dropped 3.74%, the index had consistently rewarded investors during the month. The current slump has also halted broader market momentum, with both midcap and smallcap indices facing concurrent selling pressure.

Broad-Based Bleeding

According to data compiled from Ace Equity, the downturn has been widespread across sectors. Out of the 50 constituents in the Nifty index:

• 40 stocks traded lower in September through September 29
• 8 stocks managed to post gains
• 2 stocks remained virtually unchanged

Sectors that saw severe pressure included automotive, real estate, and public sector undertaking (PSU) banking stocks, alongside IT heavyweights facing headwinds from cautious global enterprise spending.

Key Drivers Behind the Meltdown

Macro Pressures and Capital Outflows: Vinit Bolinjkar, head of research at Ventura, noted that while the sharp drop feels "eerily" similar to the liquidity crunch witnessed in September 2018, the current macroeconomic triggers are distinct. Bolinjkar highlighted that the slide is being driven by stubbornly high US Treasury yields, a resilient US dollar, and aggressive selling by foreign portfolio investors (FPIs) who are rotating capital out of rich Indian valuations into cheaper regional alternatives and dollar-denominated assets.

Elevated Energy Costs: Brent crude prices hovered in the $105–$108 per barrel corridor during the month, stoking persistent worries about India's trade deficit, imported inflation, and corporate margin compression across consumer goods and transportation sectors.

Technical Deterioration: The benchmark has breached multiple intermediate moving averages, testing support zones near the 22,600 mark. Technical analysts note that closing beneath key moving averages has heightened caution among institutional traders, keeping short-term market breadth distinctly skewed toward the bears.

Tags: Nifty 50 BSE Sensex NSE FPI Outflows Ventura Securities Indian Stock Market