India benchmark shares log worst month since March as oil, global rate hikes spark outflows

According to Business Recorder, Indian equity benchmarks recorded their sharpest monthly decline since March as foreign investors pulled money out of risky assets. The Nifty 50 fell 6.1% in September to close at 22,620.45, while the BSE Sensex dropped 5.8% to 72,480.29. Foreign investors sold Indian shares worth $2.7 billion during the month, pushing year-to-date outflows to $26.8 billion.

Elevated oil prices kept inflation at the forefront of investor thinking, adding to pressure on equities. The US Federal Reserve lifted borrowing costs in September, and monetary authorities in Australia, Europe and Japan also raised rates. Higher rates of that kind tend to pull capital toward dollar assets and away from emerging market equities, the report noted.

Sector performance was weak across the board, with every one of the 16 major sectors posting losses and IT falling 11.2%. Autos dropped 8.8% after a five-month winning streak ended, while financials lost 6.3% as a proposed insurance commission cap added to the sell-off. The rupee weakened 0.7% in September and 1.2% over the quarter, and the 10-year bond fell for a third consecutive month.