Indian Stocks Post Worst Month Since March as Oil and Global Rates Pressure Markets

MUMBAI, India, September 30, 2026, ZEX PR WIRE — Indian equities ended September under pressure as rising oil prices, higher global interest rates and sustained foreign investor selling weighed on the country’s stock market.

The Nifty 50 fell 6.1% during the month to 22,620.45, while the BSE Sensex declined 5.8% to 72,480.29, according to Reuters. Both benchmarks recorded their second consecutive monthly decline, marking their sharpest monthly fall since March.

The selloff extended beyond large-cap stocks. India’s mid-cap index declined 7.6% during September, while the small-cap index fell 3.4%. All 16 major sectors tracked by the market declined during the month, with information technology among the weakest performers.

Oil Prices Add to Inflation Pressure

Higher crude prices were one of the main factors influencing investor sentiment.

Brent crude was trading around $103 a barrel on Wednesday, leaving the benchmark on course for a substantial monthly increase as geopolitical tensions continued to affect expectations for global energy supplies.

For India, higher oil prices can have a broad economic impact because the country imports a large share of its crude requirements. More expensive energy can increase import costs and add pressure to inflation, corporate margins and the country’s trade balance.

The relationship between oil and Indian equities has therefore become an important consideration for investors as the fourth quarter begins.

Foreign Investors Pull Capital From Indian Equities

Foreign portfolio investors were another major source of pressure.

Foreign investors sold $2.7 billion worth of Indian equities during September, taking their total selling for the year to $26.8 billion, according to Reuters. The selling reflected a broader shift toward risk reduction as higher U.S. interest rates made dollar-denominated assets more attractive.

The U.S. Federal Reserve raised its key interest rate during September, while central banks in Australia, Europe and Japan also moved toward tighter policy settings, adding to pressure on emerging-market assets.

Higher global yields can make emerging-market equities relatively less attractive to international investors, particularly when currency and geopolitical risks are also elevated.

The Indian rupee also weakened during the month, declining 0.7% against the dollar in September and 1.2% during the quarter, according to Reuters.

IT Stocks Face a Separate Pressure Point

India’s technology sector experienced particularly strong selling, with the Nifty IT index falling 11.2% during September. The sector’s exposure to U.S. clients makes it sensitive to changes in American economic conditions and corporate technology spending.

Higher U.S. interest rates can also affect technology companies through their impact on business investment and valuations.

There was some relief for IT stocks toward the end of the month. Reuters reported that the Nifty IT index rose 2.6% on Wednesday and was on course to break an eight-session losing streak after comments from a Federal Reserve official reduced some expectations of another rate increase.

The broader Indian market, however, remained sensitive to foreign flows, crude prices and global monetary policy.

As October begins, investors will be watching whether falling equity valuations can attract fresh domestic or foreign buying, while monitoring oil prices, global interest rates and corporate earnings for signs of a shift in market conditions.

For Indian stocks, September has left a market environment where global macroeconomic developments remain closely connected to domestic equity performance.