Indian stock markets came under heavy selling pressure on September 29, with the Sensex falling nearly 700 points from its previous close and the Nifty briefly slipping below the 22,600 level before recovering from the day’s lows. Here are the key factors weighing on investor sentiment and what supported the subsequent recovery.
Indian benchmark indices faced a volatile trading session on Tuesday, September 29, as a combination of rising crude oil prices, geopolitical uncertainty, foreign investor selling and elevated US bond yields weighed on sentiment.
The Nifty 50 opened at 22,732.45, compared with its previous close of 22,780.25, while the Sensex opened at 72,633.38, against its previous close of 72,771.72.
Selling intensified during the session, pushing both benchmarks sharply lower. The Sensex fell by nearly 700 points from its previous close, while the Nifty moved below the 22,600 mark before both indices recovered some of their losses.
See more of our coverage in your search results.
Add INDYASTORY on GoogleNifty and Sensex: Key Stock Movers
Several heavyweight stocks contributed to the pressure on the benchmarks.
More Read
Within the Nifty 50, HDFC Life Insurance, Apollo Hospitals Enterprise and HCL Technologies were among the notable laggards, falling by as much as around 2% during the session.
On the other hand, Dr. Reddy’s Laboratories, Adani Ports and Special Economic Zone and Coal India were among the gainers, rising by up to around 1.9%.
In the Sensex pack, Infosys, HCL Technologies and Bajaj Finance were among the stocks under pressure, declining by as much as around 1.4%.
More Read
Adani Ports, Kotak Mahindra Bank, Trent and ITC were among the gainers in the index, with advances of up to around 1%.
See more of our coverage in your search results.
Add INDYASTORY on Google1. Crude Oil Prices Surge
One of the major concerns for Indian investors was the sharp rise in crude oil prices.
Brent crude futures rose around 1.5% to approximately $107 a barrel on Tuesday, amid concerns over possible disruptions to Middle East energy supplies linked to tensions involving the US and Iran.
Higher crude prices are particularly important for India because the country relies heavily on imported oil.
See more of our coverage in your search results.
Add INDYASTORY on GoogleA sustained rise in crude can increase India’s import bill and potentially add to inflationary pressure. It can also affect corporate margins and the broader economic outlook if energy costs remain elevated.
These concerns added to the selling pressure in Indian equities.
More Read
2. US-Iran Tensions Add to Market Uncertainty
Geopolitical uncertainty surrounding the US-Iran situation was another factor influencing investor sentiment.
Markets have been particularly sensitive to the possibility of disruptions involving important energy routes in the Middle East, including the Strait of Hormuz.
A prolonged disruption to energy supplies could keep crude oil prices elevated and add to concerns about inflation and global economic growth.
For equity investors, the combination of higher energy prices and geopolitical uncertainty can increase risk aversion and contribute to volatility.
3. Foreign Investors Continue Selling Indian Equities
Foreign portfolio investor activity has also remained an important factor for the Indian market.
According to the figures cited for the session, FPIs sold around ₹5,353 crore worth of Indian equities on Monday.
Their cumulative selling in September was reported at around ₹20,695 crore.
This follows reported FPI purchases of approximately ₹29,631 crore in August and ₹20,200 crore in July.
The reported cumulative FPI outflow for 2026 stood at around ₹2.45 lakh crore, making foreign flows an important factor to watch as investors assess the direction of Indian equities.
4. US Treasury Yields Remain Elevated
US bond yields have also been adding pressure to global risk assets.
The 10-year US Treasury yield moved above 5%, according to the market data cited in the report.
Higher US Treasury yields can make dollar-denominated fixed-income investments relatively more attractive to global investors. That can affect capital flows into emerging markets, including India.
Higher yields can also tighten global financial conditions and increase concerns about the potential duration of restrictive interest-rate conditions.
The rise in energy prices has added another layer to these concerns because a sustained increase in crude can complicate the inflation outlook.
5. Weakness Across Global Markets
The weakness was not limited to Indian equities.
Asian markets were broadly lower after Wall Street ended weak, reflecting a broader deterioration in global risk sentiment.
Investors are simultaneously monitoring geopolitical tensions, crude oil prices, inflation expectations and bond yields.
When several of these factors move unfavourably at the same time, investors may reduce exposure to riskier assets, increasing volatility in equity markets.
Sensex Recovers Around 500 Points From Intraday Low
Despite the sharp decline, the market subsequently recovered part of its losses.
The Sensex rose around 500 points from its intraday low, while the Nifty reclaimed the 22,700 level during the recovery.
One factor cited for the rebound was buying interest at lower levels.
After the sharp sell-off, some investors appeared to use the decline to accumulate selected stocks at lower valuations. This helped the benchmarks move away from their session lows.
However, a recovery from an intraday low does not by itself establish that the broader market trend has reversed.
India VIX Eases
The India VIX, which tracks expected market volatility, also eased during the recovery.
The index reportedly declined from 14.77 to 14.04.
The moderation in the volatility gauge suggested some easing in immediate market nervousness as the benchmarks recovered from their lows, although investors continued to monitor the broader macroeconomic and geopolitical risks.
What Technical Analysts Are Watching
From a technical perspective, the 22,600 level on the Nifty remains an important area to watch.
According to the technical view cited in the report, a decisive and sustained move below this level could signal further weakness, while the index’s bearish daily structure and lower-top formation point to a soft short-term trend.
At the same time, the sharp decline has pushed the market towards potentially oversold conditions, leaving room for short-term rebounds.
Technical levels should therefore be viewed alongside broader factors such as crude prices, foreign flows, US yields and geopolitical developments.
Why Did the Stock Market Fall and Then Recover?
The September 29 session reflected competing forces.
The initial sell-off was driven by a combination of:
- Rising crude oil prices
- US-Iran geopolitical uncertainty
- Concerns over Middle East energy supplies
- Foreign portfolio investor selling
- Elevated US Treasury yields
- Weakness across global equity markets
- Renewed concerns about inflation and economic growth
The subsequent recovery from the day’s lows was supported by buying at lower levels, easing volatility and potentially oversold conditions.
For investors, the key question now is whether these supportive factors can persist while the market continues to contend with elevated oil prices, foreign outflows and global macroeconomic uncertainty.
Market disclaimer: This article is for informational purposes only and does not constitute investment advice, a recommendation to buy or sell securities, or a prediction of market direction. Stock-market conditions can change rapidly, and investors should conduct their own research or consult a qualified financial adviser before making investment decisions.
