Stories
September Selloff Spreads: SMIDs Join Correction as Macro Pressures Deepen
- •Indian equities end September on a weak note, with Nifty and Sensex down 6%, as the correction spreads from largecaps to mid- and smallcaps.
- •Nifty Midcap index fell 7% and Smallcap index 3%; auto, IT, realty, infrastructure, and consumer durables sectors saw significant declines.
- •Macro pressures intensified with US Treasury yields reaching multi-year highs and Brent crude surpassing $100 a barrel, raising concerns for India's import bill and inflation.
- •Despite the selloff, Motilal Oswal maintains a resilient economic outlook, forecasting strong earnings growth for Nifty and broader markets over FY26-28E.
- •Domestic events like the Tata Group dispute and IRDAI's proposed insurance reforms added to market volatility, impacting specific stocks and sectors.
Key Questions Answered
Indian equities declined during the September series due to elevated crude prices, multi-year high US bond yields, renewed foreign selling, and various company-specific and regulatory shocks. The Nifty and Sensex both fell by around 6 percent.
Sector performance varied widely, with auto and IT suffering the steepest losses at around 9 percent each. Realty, infrastructure, and Nifty PSU Bank declined by about 7 percent, while private banks fell roughly 3.5 percent and consumer durables dropped 6.5 percent. Meanwhile, pharma bucked the negative trend with a marginal 0.7 percent gain.
The Tata Group came under pressure due to a public disagreement between Tata Trusts and the Tata Sons board concerning N Chandrasekaran's reappointment and the potential listing of the holding company. Tata Trusts, which owns roughly 66 percent of Tata Sons, opposed the board's decisions while the board defended their validity.
