Nifty Fell 6.0%. Smallcaps Fell Half as Much.

Sep'26

Nifty 50 fell 6.0% in September, its second straight monthly decline. Midcap 150 took the hardest hit at −7.1%, while Smallcap 250 (−3.1%) and Microcap 250 (−1.0%) held up far better. Stretch the lens to a year and the gap is starker: Nifty 50 is down 7.1%, the Smallcap 250 up 7.2%. Our view: when people say equities haven't beaten fixed deposits, they usually mean the index. What you owned, and how it was managed, matters more than the benchmark.

The US Fed raised rates on September 16, its first hike in over three years.

Total return by market-cap segment, 1 month and 1 year to Sep 30, 2026

Media Held Up. IT Didn't.

Sector index total return, September 2026

Fell least

Media+1.7%

Commercial & Transport Services+1.2%

Power−0.4%

Pharma−2.8%

REITs & Realty−2.8%

Fell most

IT−11.2%

NBFC−9.9%

Consumer Durables−9.4%

Hospitals−9.1%

Auto−8.8%

Only two sectors finished higher: Media (+1.7%) and Commercial & Transport Services (+1.2%), the latter as Adani Ports posted record August cargo volumes (50 million tonnes, up 19% year on year) and won a contract for two dry bulk berths at Paradip Port.
IT fell 11.2%, with TCS and Infosys down 12–15%, as the Fed's hike to 3.75–4.00% weighed on the sector's largest market.
NBFCs fell 9.9% as funding costs rose: Nomura estimates NBFC bond rates are up 29–70 bps since the RBI turned hawkish. Lenders that borrow from markets feel a rate cycle faster than banks with deposits, and Bank fell less, at −5.9%.
Regulation hit two sectors. Hospitals ended the month with a ~5% one-day drop after the Supreme Court criticised drug mark-ups at corporate hospitals, and Insurance (−5.4%) fell in a month when IRDAI floated a draft to cap distributor commissions and selling costs. Neither is binding yet, and the market repriced anyway. Our read: the destination may be good for customers, but the road there is messy, which is why sector diversification matters.

30 IPOs. One Raised Most of the Money.

September had 30 mainboard IPOs, the most in a month since December 1996, raising ~₹38,800 crore.
NSE's own issue raised ₹22,563 crore, 58% of the total. The other 29 averaged ~₹560 crore each.
Across 2026, ~60% of mainboard IPO money went to existing shareholders selling, not into the companies.
Recent listings held up: the Nifty IPO index rose 1.1% while Nifty 50 fell 6.0%.
Open question: lock-ins for anchor and pre-IPO investors end over the coming months, and that supply reaches the market too.
Our read: none of this is a red flag, and founders and funds should get to cash out. But sellers pick the timing, and allotments bought for the listing pop can quietly become positions no one chose.

NSE: ₹22,563 cr29 other IPOs: ~₹16,200 cr

Share of ~₹38,800 cr mainboard IPO proceeds, September 2026. Small tiles shown equal-sized

Watch this month:Whether the RBI hikes on October 7, which matters most for rate-sensitive lenders, TCS opening Q2 results on October 8, and the Fed's next call on October 28.

Index and sector returns: NSE Indices, Index Dashboard, September 2026