The Nifty’s worst month since March, foreign investors selling again, forex reserves at a record and then falling, a drought-level monsoon, and a growth forecast cut. Five stories from September.
September was the month the good news of the summer ran out. The stock market had its steepest monthly fall since March, foreign money left again and oil climbed back toward $100 at points late in the month. The RBI meets next week, and the mood around that meeting has changed. Here are the five stories that mattered.
1. The market’s worst month since March
The Nifty 50 had its steepest monthly fall since the first weeks of the war, as high global borrowing costs, foreign selling and renewed oil fears weighed on sentiment.
2. Foreign investors sold again
After brief buying in July and August, foreign portfolio investors sold more than ₹23,000 crore of Indian shares in the first three weeks of September, according to depository data. Domestic mutual funds absorbed much of it, as they have all year.
3. Reserves peaked
India’s foreign exchange reserves hit a record $785.7 billion on September 4, helped by summer inflows and valuation gains. By the end of the month they were falling again as the RBI sold dollars to slow the rupee.
4. The driest monsoon in years
With the monsoon about 15% short, the government allowed duty-free sugar imports and began selling subsidised onions. Food inflation is rising, and the winter crop is at risk if El Niño lingers.
5. A growth forecast cut
BMI, part of the Fitch group, cut its growth forecast for 2026-27 to 6.6%, from 7.7% in 2025-26, saying the lift from last year’s GST cuts was fading and higher inflation was squeezing household incomes. It expects the rupee to average around 95 to the dollar this year.
The thread: every pressure on the economy pointed at the same meeting room in Mumbai.
Falling shares, a falling rupee, falling reserves and rising food prices all push the RBI in one direction. For most of 2026 it has held, arguing that inflation came from supply shocks it could not fix. September made that argument harder to sustain.
Sources: PTI market reports; NSDL; RBI weekly statistical supplement; IMD; BMI Country Risk.
- The Nifty had its steepest monthly fall since March.
- Foreign portfolio investors sold over ₹23,000 crore of Indian shares in the first three weeks.
- Forex reserves hit a record $785.7 billion on September 4, then started falling.
- The monsoon was on track for its weakest year since 2009, and BMI cut India’s growth forecast to 6.6%.
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