Nifty 50 September Recap: 7 Major Events That Took Place and Their Impact on the Markets
September was a difficult month for Indian markets, with the Nifty 50 and Bank Nifty both witnessing sharp declines. The market remained under pressure as investors tracked the US Fed rate hike, UPI MDR changes, IRDAI regulations, US pharma tariff concerns, and developments around NSE and BSE.
Index Performance During September
In September, the Nifty 50 declined 6 percent, falling from its August closing level of 24,080 to close the month at 22,620. The decline reflected continued pressure on the broader market as investors remained cautious amid several global and domestic developments.
The Bank Nifty fell 5.74 percent during the month, declining from its August closing level of around 58,040 to close September at 54,633. The banking index also remained under pressure through September, contributing to the weakness seen across the major market indices during the month.
Biggest gainers and Losers of the month in Nifty 50: Among the biggest gainers in the Nifty 50 during September, Coal India led with a rise of 5.55 percent. Dr Reddy and Adani Ports also gained during the month, with both stocks rising around 5 percent. These stocks remained among the stronger performers in the index.
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On the other hand, Bajaj Finserv was the biggest loser, declining 13 percent during September. TCS and Infosys both fell 12 percent, while M&M declined 11 percent. These stocks were among the worst performers within the Nifty 50 during the month.
Major factors that played a crucial role in September:
US Fed Rate Hike : The US Federal Reserve raised interest rates by 25 basis points to 3.75 percent to 4 percent in September, marking its first hike since 2023. The move pushed US bond yields and the dollar higher, while the rupee came under pressure. This also raised concerns around foreign flows into emerging markets such as India.
The impact was felt particularly across IT, banking and other rate-sensitive sectors. Higher US rates can reduce the attractiveness of emerging market assets and put pressure on foreign flows, while Indian IT stocks can face concerns over US technology spending. On September 17, IT stocks were among the sectors under pressure after the Fed decision.
IT Stocks Rally on September 15 : Indian IT stocks saw a sharp rally on September 15 as concerns around AI disruption eased. The Nifty IT index jumped as much as 5.2 percent intraday, while HCLTech, Tech Mahindra, TCS, Persistent Systems and Wipro also gained sharply. The move came after expectations of a slower pace of AI development improved sentiment toward traditional IT companies.
The rally was also supported by recovery buying after prolonged weakness in the IT sector. Investors expected a slower AI development cycle to give traditional IT companies more time to adapt their business models and build AI capabilities. However, the Nifty IT index pared back part of its gains and closed around 2 percent higher on September 15.
UPI MDR Introduced : The government introduced a 0.4 percent MDR on specified UPI merchant transactions above Rs 2,000, while around 96 percent of P2M transactions remain unaffected. The new framework could create a Rs 16,000 to Rs 17,000 crore revenue opportunity for the ecosystem, with banks expected to receive the largest share of the revenue pool.
The move could benefit YES Bank, Bank of Baroda, PNB, IndusInd Bank, HDFC Bank and Axis Bank among banking stocks. In the payment space, Paytm, Pine Labs and MobiKwik could benefit from their role in the UPI ecosystem. CMS Info Systems could see an indirect impact through its exposure to cash management and ATM infrastructure.
The announcement also triggered buying in several related stocks as investors assessed the potential revenue opportunity. Paytm gained as much as 7.25 percent, MobiKwik rose 6.4 percent, and YES Bank gained more than 4 percent during the September 16 session. CMS Info Systems also gained around 7 percent as the market reacted to the new framework.
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IRDAI Insurance Regulations : IRDAI proposed changes to insurance distribution rules covering Expenses of Management, segmental commissions, and hard caps on commissions, along with greater transparency in commission disclosures. The proposed reforms raised concerns around the earnings of insurance distributors and intermediaries, while the impact on insurers could vary depending on their distribution models.
The proposals particularly affected insurance distributors, insurers, and banks with insurance distribution businesses. PB Fintech and Turtlemint were identified as among the most vulnerable, while banks including Axis Bank and HDFC Bank could also face an impact. LIC and SBI Life were considered relatively insulated due to their distribution models.
The impact was visible in the market on September 24, with PB Fintech falling 35 percent and Turtlemint hitting a 20 percent lower circuit. HDFC Life declined around 9 percent, while ICICI Prudential Life, Star Health and other insurance-linked stocks also fell sharply. Piramal Finance, L&T Finance and Max Financial were among the other stocks under pressure.
NSE IPO and BSE’s Nifty 50 Entry : September saw two major capital market developments, with the NSE IPO drawing significant attention. The IPO had a Rs 22,569 crore offer for sale at a price band of Rs 1,700 to Rs 1,785, valuing the exchange at around Rs 4.4 lakh crore at the upper end.
The month also saw BSE enter the Nifty 50, replacing Wipro from September 30. BSE’s six-month average free float market capitalisation stood at around Rs 1.41 lakh crore, compared with around Rs 55,930 crore for Wipro, supporting its inclusion in the index.
US Pharma Tariff Concerns : The US has brought about an asymmetry in terms of tariffs on pharmaceuticals, wherein certain patented drugs have been assigned a duty rate of 100 percent, whereas certain specialty drugs, which may fall under the category of eligible countries, including India, may receive 0% tariffs. The list includes orphan drugs, fertility drugs, plasma-derived products, cell and gene therapies, and antibody drug conjugates.
In the Indian pharma stocks, Zydus Lifesciences has exposure to orphan drugs via Zycubo, whereas Mankind Pharma has exposure to fertility and specialty biologics via Bharat Serums and Vaccines. Sun Pharma is in the specialty drugs and orphan drugs pipeline, whereas Piramal Pharma has exposure to antibody-drug conjugates via its CDMO business.
Gland Pharma also has exposure to fertility drugs via Cetrorelix; however, the medicine in question is a generic one, and generics are not covered under the Section 232 tariff policy yet.
Crude Oil, Rupee and Inflation Pressure : Crude oil continued to pose a challenge in the month when Brent crude went up from $90 per barrel in early September to almost $110 per barrel before coming down to $97 per barrel. The sudden jump in crude prices sparked fears of an increase in the import cost as well as higher inflation in the country.
The rupee also came under pressure during the month. It initially appreciated 0.76 percent from around Rs 95 to a low of Rs 94.29 per dollar, before geopolitical developments pushed it to Rs 96.14 per dollar, marking a 1.98 percent depreciation over the month. With the rupee currently around Rs 95.5 per dollar, the combination of higher crude and a weaker currency added pressure on inflation and rate-sensitive sectors.
Conclusion
September was a difficult month for Indian markets, with the Nifty 50 declining 6 percent and Bank Nifty falling 5.74 percent. The month was marked by multiple developments, from the US Fed rate hike and UPI MDR changes to IRDAI reforms, pharma tariff concerns, crude oil volatility and rupee weakness.
At the same time, the month saw important market developments including the NSE IPO and BSE’s entry into the Nifty 50. The Nifty also extended its weekly losing streak to eight weeks, surpassing the seven-week losing streak recorded in 2008. With global and domestic factors continuing to shape sentiment, September highlighted the multiple challenges Indian equities faced during the month.