Sensex plunges 778 points, Nifty drops 279 points as rising crude prices and US yields weigh on markets.
Investors await the US Federal Reserve's policy decision later today, with elevated crude oil prices and inflation concerns remaining key market drivers.
The story
Indian benchmark indices experienced a sharp sell-off on Tuesday, September 15, with the Sensex tumbling 777.94 points, or 1.04%, to close at 74,003.82. The Nifty 50 also dropped significantly, falling 279.50 points, or 1.19%, to settle at 23,118.60, marking its lowest closing level since April. [3, 10] The market decline was primarily driven by surging crude oil prices, with Brent crude remaining above $105 a barrel, intensifying concerns over India's import bill and domestic inflation. [3, 7] A sharp rise in US Treasury yields, with the 10-year yield touching 5.04%, also contributed to the negative sentiment, prompting capital reallocation from emerging markets. [6, 12] Foreign Institutional Investors (FIIs) were net sellers for the fifth consecutive session, offloading equities worth ₹2,977.86 crore on Tuesday. [5, 6, 29] Domestic Institutional Investors (DIIs), however, provided some counterbalance by buying equities worth ₹2,686.05 crore. [5, 6, 29] Banking, auto, and oil & gas shares were among the sectors that dragged the Sensex lower. [7] Meanwhile, on Wednesday, September 16, Indian equities opened higher amid easing oil prices and a modestly strengthening rupee, though overall sentiment remained cautious ahead of the Fed decision. [4, 7]
The tape
| Instrument | Last | Change |
|---|---|---|
| Nifty 50 | 23,118.60 | -279.50 (-1.19%) |
| Sensex | 74,003.82 | -777.94 (-1.04%) |
| Bank Nifty | 56,000 (approx) | Bearish candle formed |
| USD/INR | 95.929 | -0.15% |
| India VIX | 13.43 | +9.28% |
Flows & data
| Item | Reading | Read |
|---|---|---|
| FII Net Flow | -₹2,977.86 crore (Sept 15, 2026) | Foreign investors were net sellers for the fifth consecutive session. |
| DII Net Flow | +₹2,686.05 crore (Sept 15, 2026) | Domestic investors provided buying support against foreign outflows. |
| Unemployment Rate | 5% (August 2026) | India's unemployment rate fell to a six-month low. |
| Bank Deposits Growth | 17.76% YoY (August 31, 2026) | Bank deposits recorded their highest year-on-year growth since 2019. |
| Merchandise Exports | $43.81 billion (August 2026) | Exports surged 26%, helping to narrow the monthly trade deficit to $26.86 billion. |
IPOs & the primary market
The primary market remains active, with the National Stock Exchange (NSE) IPO set to open for subscription from September 17 to September 21, 2026, priced at ₹1700–₹1785 per share and aiming to raise ₹22,561.57 crore. [17] Its Grey Market Premium (GMP) was ₹160 as of September 16, indicating a 9% premium over the upper price band. [17] Goldman Sachs Asset Management, Franklin Templeton, and Fidelity International are among the global investors expected to participate as anchor investors. [20] In a significant development, the Reserve Bank of India (RBI) on September 16 rejected Tata Group's appeal for an exemption, requiring its holding company, Tata Sons, to comply with IPO regulations. [32] Analysts estimate a potential Tata Sons IPO could exceed $120 billion. [32] Several other issues are also live or upcoming this week, including SME IPOs for Quanto Agroworld, Shakti Polytarp, and Vama Wovenfab, which opened on September 15. [11] Veegaland Developers IPO saw strong demand, subscribed 13.5 times on its final day, September 15. [12, 20]
Valuation watch — India & global
Indian market valuations continue to draw attention amidst global cues, though specific Nifty PE levels since the last edition were not immediately available. The broader market sentiment is influenced by rising US Treasury yields, with the 10-year yield climbing to 5.04%. [6, 12] This upward pressure on global bond yields tends to make emerging market equities, including India's, less attractive by increasing the cost of borrowing and offering a relatively safer return elsewhere. [6, 31] The ongoing IPO boom in India is also a factor watched by analysts for signs of market froth. [7] Nomura's Head of Global Macro Research, Robert Subbaraman, noted that massive global debt issuance is contributing to upward pressure on yields. [31] While India's resilient growth provides a domestic buffer, the interplay of elevated global yields and persistent foreign outflows continues to shape the valuation landscape.
Monsoon watch
The monsoon season continues, with very heavy rainfall (12-20 cm) recorded over West Madhya Pradesh, Gujarat, and Tamil Nadu during the 24 hours ending 8:30 AM IST on September 15. [27] Heavy rainfall (7-11 cm) also occurred over West Uttar Pradesh, East Rajasthan, Coastal Andhra Pradesh, Telangana, and South Interior Karnataka. [27] Despite these localized intense spells, the overall rainfall for the June-September monsoon season remains a concern. As of September 13, cumulative rainfall was 14.7% below the benchmark, leading to expectations that the full monsoon will fall into the 'deficient' category (below 90% of the long-period average). [16] Nearly half of India's districts (343 out of 740) have received 'deficient' to 'large deficient' rainfall. [16] This uneven distribution and overall shortfall have impacted kharif sowing, with total acreage falling below last year's levels, particularly for rice, raising concerns for crop yields and rural demand. [16, 21]
What we'll be watching
- The US Federal Reserve concludes its two-day policy meeting today, September 16, with its decision keenly awaited by global markets. [2, 3]
- The National Stock Exchange (NSE) IPO opens for subscription on September 17, 2026. [17]
- Jindal Supreme (India), Hero Motors, and SS Retail IPOs open for subscription from September 16-18, 2026. [11, 23]
- Investors will monitor crude oil price movements and geopolitical developments for their impact on inflation and market sentiment. [2, 7]
- The Reserve Bank of India's stance on interest rates, with Nomura anticipating two 25-basis-point hikes, will be closely watched. [31]
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