Red Monday and the Day After: More Than ₹12 Lakh Crore of Market Value Gone in Two Sessions, and the Five Forces That Did It
On Monday 28 September 2026 the Sensex fell 1,124 points and the Nifty closed at 22,780.25, a six-month low, erasing ₹8.88 lakh crore of listed market value in one session. On Tuesday morning the fall continued and the two-day loss crossed ₹12 lakh crore. The triggers were a rejected Iran offer, Brent at $108, US yields at a 19-year high, foreign selling of ₹5,353 crore and a rupee past 96. What the government and the RBI have done, how this compares with March and May, and what the numbers mean for a household with SIPs.
Indian investors lost more in two trading sessions this week than the central government plans to borrow in the next six months. On Monday 28 September the Sensex fell 1,124 points and the Nifty 50 closed at a six-month low. On Tuesday morning both fell again. The combined value of every company listed on the BSE, which stood at ₹483.25 lakh crore on Friday evening, dropped to about ₹470 lakh crore at Tuesday's low. No Indian company failed, no bank defaulted and no domestic data disappointed. This piece sets out what did happen, in order, with the numbers and their sources, and ends with what it means for a household that invests through SIPs.
Written on the afternoon of 29 September 2026, before the market closed. Monday's figures are closing figures. Tuesday's figures are intraday, with the time given, and will be replaced with closing figures. Where sources disagree, the range is shown. This is explanation, not advice, and nothing here is a forecast.
−1,124.02 points on the Sensex on Monday, to 72,771.72 · 22,780.25 — Nifty 50 close, down 1.56% · ₹8.88 lakh crore — market value erased on Monday alone · $108.83 — Brent crude's high on Monday · 5.27% — US 10-year yield's high on Monday, the most since 2007 · −₹5,353 crore — foreign investors' net sales on Monday (provisional).
1. What happened, hour by hour
The cause arrived on Saturday, when markets were shut. On 26 September the US President said he had rejected Iran's seven-day plan to reopen the Strait of Hormuz. We covered the offer in this week's global finance review and said Monday would be the first session to price the rejection. It did.
| When | What happened |
|---|---|
| Sat 26 Sept | US rejects Iran's offer to reopen Hormuz. Markets are closed. |
| Mon 28 Sept, morning | Brent jumps more than $4 in early trade and touches $108.83. The Nifty opens at 23,064.90, below Friday's 23,140.50, and never trades above 23,080.25. |
| Mon, about 12:45 pm | Sensex down more than 950 points at 72,942.59. All 30 Sensex shares are lower. |
| Mon, 3:30 pm close | Sensex 72,771.72 (−1,124.02, −1.52%). Nifty 22,780.25 (−360.25, −1.56%), after a low of 22,762.20. |
| Mon, 4 pm | Government data shows factory output grew 8% in August. The market had already closed. |
| Mon night, New York | Dow −0.67%, S&P 500 −0.77%, Nasdaq −0.92%. US 10-year yield touches 5.272%, a fresh 19-year high. |
| Tue 29 Sept, 9:53 am | Sensex 72,164.34 (−607). Nifty 22,599.55 (−181). BSE market value about ₹470 lakh crore. |
| Tue, 1 pm | Some recovery: Sensex 72,408.45 (−0.50%), Nifty 22,669.75 (−0.49%). |
2. How much was lost, and why the headlines disagree
You will have seen ₹6 lakh crore, ₹7.5 lakh crore, ₹8 lakh crore and ₹8.9 lakh crore quoted for the same Monday. They are all the same event, measured at different times. The ₹6 lakh crore figure was taken at midday. The figure based on the BSE's closing data is the largest:
| Value of all BSE-listed companies | ₹ crore |
|---|---|
| Friday 25 September, close | 4,83,25,067 |
| Monday 28 September, close | 4,74,36,620 |
| Fall on Monday | 8,88,447 |
| Tuesday 29 September, early trade (Business Standard) | about 4,69,96,000 |
| Fall over two sessions, at Tuesday's early low | about 13,29,000 |
So the two-day loss crossed ₹12 lakh crore on Tuesday morning and was about ₹13.3 lakh crore at the early low. The market recovered part of the morning's fall by 1 pm, so the figure at the close may be smaller. Over the past month the damage is larger. Between 27 August and 28 September the Sensex fell 4,161.87 points (5.40%), the Nifty fell 1,310.6 points (5.44%), and listed market value shrank by ₹17.17 lakh crore.
One point about these figures is often lost. "Wealth wiped out" is a change in the quoted price of shares, multiplied by all the shares in existence. No cash left anyone's bank account unless they sold. An investor who held through Monday owns exactly the same number of shares and fund units on Tuesday. The loss becomes real only when units are sold at the lower price.
3. Where the selling landed
The fall was broad. The smaller the company and the more it depends on borrowed money or government ownership, the harder it was hit.
| Index, Monday 28 September | Close | Change |
|---|---|---|
| Nifty PSU Bank | 8,026.10 | −3.24% |
| Nifty Realty | 850.90 | −2.1% to −2.3% |
| Nifty Next 50 | 70,309.50 | −2.05% |
| Nifty Energy | 36,693.20 | −2.00% |
| Bank Nifty | 54,471.65 | −1.99% |
| Nifty Smallcap 100 | 19,351.10 | −1.85% |
| Nifty Metal | 12,854.40 | −1.8% to −1.9% |
| Nifty Midcap 100 | 59,914.20 | −1.63% |
| Nifty 50 | 22,780.25 | −1.56% |
| Nifty FMCG | 45,264.35 | −1.47% |
| Nifty Pharma | 26,761.65 | −0.89% |
| Nifty IT | 28,086.50 | −0.26% |
Only three Nifty shares rose: Dr Reddy's (+1.67%), Infosys (+0.30%) and HDFC Life (+0.11%). The largest falls were in Tata Motors (−3.00%), Adani Enterprises (−2.93%), Jio Financial (−2.86%), Power Grid (−2.84%) and Larsen & Toubro (−2.83%). On the NSE as a whole, 2,716 shares fell and 869 rose. 177 touched a 52-week low and 142 hit their lower circuit limit.
The pattern has a logic. IT and pharma companies earn in dollars, so a weaker rupee helps them. State-owned banks hold large amounts of government bonds, and those bonds lose value when yields rise. India's 10-year government bond yield reached 7.14% on Monday, its highest since May. Realty, energy and capital goods depend on cheap credit and cheap fuel, and both became less likely on Monday.
The fear gauge rose but did not spike. India VIX climbed about 12% to around 13.7, a level that is still low by the standards of past crises. Monday was heavy selling. It was not panic.
4. The five forces behind the fall
Oil: the trigger
India imports more than 85% of its crude, so the oil price acts on the rupee, inflation, the government's finances and company costs at the same time. After the US rejection, Brent rose as high as $108.83 a barrel on Monday. It then gave back most of the gain and settled near $105, because Qatari mediators were expected to hold fresh talks with both sides and Saudi Arabia's East–West pipeline was reported to be working again. On Tuesday it was trading around $106.50 to $107.
The supply picture explains why the price reacts so sharply to each headline. Before the conflict began in February, about 20 million barrels a day passed through the Strait of Hormuz. In September the flow was about 7.5 million. Middle East exports overall have recovered to nearly 13 million barrels a day, the highest since the war began, but a reopening of the strait is what would bring the price down, and Saturday's rejection pushed that further away.
US bond yields: the pull
The US 10-year Treasury yield touched 5.272% on Monday and closed near 5.24%, the highest in 19 years. The 30-year was at 5.56% and the 2-year at 4.93%. The Federal Reserve raised rates on 16 September, and dearer oil raises the chance that it does so again. When a US government bond pays more than 5% in dollars, a foreign fund needs a strong reason to hold Indian shares that also carry currency risk. Wall Street fell on the same logic: the S&P 500 closed at 7,683.69 and the Nasdaq at 26,820.38.
Foreign selling: the mechanism
Bought ₹9,048 crore, sold ₹14,401 crore (provisional)
Bought ₹15,918 crore, sold ₹10,729 crore
Foreign selling, against ₹1.66 lakh crore in all of 2025
Foreign investors bought Indian shares in July and August, a net ₹49,831 crore over the two months on depository data. In September they turned sellers again. Monday's ₹5,353 crore followed ₹3,694 crore on Friday. Domestic institutions, mostly mutual funds investing monthly SIP money, bought ₹5,189 crore on Monday. They absorbed 97% of what foreigners sold. Prices still fell because retail and other investors were selling too, and buyers could demand a lower price.
The rupee: the amplifier
The rupee weakened past 96 to the dollar. Reports of Monday's close range from 95.98 to 96.03, with an intraday low of 96.14, and it opened Tuesday near 96.05 to 96.15. State-run banks were reported to be selling dollars on the RBI's behalf through the session. A falling rupee and foreign selling feed each other. A foreign fund that expects the rupee to fall loses on the currency even if the share price holds, so it sells sooner, and its sale of rupees for dollars pushes the currency down further. The rupee remains above the low of about 96.9 that it touched in May.
Interest rates at home: the fear
A Reuters poll taken between 18 and 28 September found that 35 of 61 economists expect the RBI to raise the repo rate by 25 basis points to 5.50% on 7 October. It would be the first increase since February 2023. Consumer inflation was 4.82% in August, above the RBI's 4% target for a third month. HSBC's chief India economist expects two increases, in October and December. Food prices add to the concern. On 26 September Maharashtra declared drought in 265 of its 358 talukas after an 18.8% shortfall in monsoon rain. Higher rates reduce what investors will pay for banks, property companies and any business that borrows heavily, which matches the list of Monday's worst performers.
5. What did not cause it: the Indian economy
Monday's domestic news was good. The Index of Industrial Production grew 8% in August against 6.7% in July. Manufacturing grew 9% and has now grown 8% or more for three months in a row. Electricity output rose 12.3%. Electrical equipment grew 30.9% and motor vehicles 25.2%. GDP grew 7.8% in April–June, August GST collections were ₹1.99 lakh crore, up 14.8%, and the current account deficit was 0.5% of GDP.
That is the view of Geojit's chief investment strategist, who described Monday as external headwinds overpowering domestic tailwinds. It matters for what comes next. A fall caused by weak company earnings repairs slowly. A fall caused by oil and foreign interest rates can reverse quickly if those reverse, and can also get worse if they do not.
6. What the government and the RBI have done
As of Tuesday afternoon we could find no statement from the Finance Ministry or SEBI on the two-day fall. That is normal. Indian governments rarely comment on a 1.5% move, and a fall of this size does not trigger the exchanges' circuit breakers, which begin at 10%. The response has come through policy, and most of it predates Monday.
| Step | When | What it does |
|---|---|---|
| Petrol and diesel prices held | Ongoing | Government sources say there is no proposal to raise pump prices. ICRA estimates the state-run fuel retailers are losing about ₹530 crore a day as a result. Households are shielded for now, and the cost sits with the oil companies. |
| Import duty on edible oils cut | 24 Sept | Crude palm and soybean oil from 10% to 5%, crude sunflower oil from 10% to nil, refined oils cut by 5 to 10 points. Aimed at food inflation. |
| Export duty on petrol, diesel and jet fuel cut | 16 Sept | Petrol to ₹0.50 a litre from ₹1.50, diesel to ₹20 from ₹25, jet fuel to ₹15 from ₹19. |
| Borrowing reduced | 25 Sept | The government will borrow ₹7.86 lakh crore in October–March, taking the year about ₹1.2 lakh crore below the Budget figure. Fewer bonds to sell supports bond prices. |
| RBI dollar sales | Ongoing | Reserves fell $14.88 billion in the week to 18 September to $765.90 billion. The RBI is spending reserves to slow the rupee's fall. |
| Gold and silver import duty raised to 15% | May | From 6%, to reduce dollar demand for bullion. |
| Fuel excise cut, then a ₹3 price rise | March, May | Special excise on petrol cut to ₹3 a litre from ₹13 and on diesel to nil from ₹10 in March. Pump prices were raised ₹3 a litre on 15 May. |
The government's approach is visible in that list. It has tried to keep oil from reaching household prices, through duty cuts and by holding pump prices, and has left the currency to the RBI. The cost is carried by the oil companies and by the reserves. Both can carry it for some time, and both have limits. That is one reason oil company and state-owned bank shares were among Monday's weakest.
7. How this compares with March and May
| Episode, 2026 | Sensex | Nifty close | Market value lost | Brent |
|---|---|---|---|---|
| 19 March (one day) | −2,497 (−3.2%) | 23,002 | about ₹11.5 lakh crore | $111.07 |
| 11–12 May (two days) | −1,456 on the second day | 23,379 | about ₹12 lakh crore | not compared |
| 28 September (one day) | −1,124 (−1.52%) | 22,780.25 | ₹8.88 lakh crore | $108.83 high |
Two things stand out. Monday's fall was half the size of March's in percentage terms. But it started from a lower level, so the Nifty closed below where it ended on 19 March. The market has fallen steadily more than sharply. The Nifty has declined for seven weeks in a row. If this week also ends lower it will be eight, and the longest such run on record, by WION's count, is nine weeks in 2001.
At Monday's close the Nifty traded at 19.3 times its companies' earnings, with a dividend yield of 1.24%, and stood 13.6% below its 52-week high. By convention a fall of 10% is called a correction and 20% a bear market. This is a correction.
8. What it means for you
| If you… | What the two days change |
|---|---|
| Run SIPs in equity funds | Your next instalment buys more units than last month's did. A SIP exists for months like this one. Stopping it after a 13% fall means you have paid the higher prices and skip the lower ones. The fund history pages show how each fund behaved in the falls of 2020 and 2022, and the investment returns calculator shows what continuing through a fall does to the final sum. |
| Need the money within three years | Money for a fee, a down payment or a wedding should not have been in equity, and the fall does not change that. Moving it in stages is a decision about your deadline, not about the market. |
| Hold shares or funds at a loss | A loss you book can reduce tax. A short-term capital loss can be set off against any capital gain, short or long term. A long-term loss can be set off only against long-term gains. Unused losses carry forward for eight years, but only if the return is filed by the due date. Long-term gains on listed shares and equity funds are taxed at 12.5% above ₹1.25 lakh a year and short-term gains at 20%. Work out the figures on the capital gains calculator before selling anything for tax reasons alone. |
| Have a floating-rate home loan | Most economists polled expect a 25 basis point rise on 7 October. Test what that does to your instalment or tenure on the EMI calculator. |
| Hold state-owned bank or oil company shares | These sit closest to the two costs the government is asking others to absorb: bond losses from rising yields, and fuel sold below cost. |
| Trade in futures and options | A VIX rising 12% in a day raises option prices and margin calls together. Borrowed positions are where a bad week becomes a permanent loss. |
What to watch next
| Date | Event | Why it matters |
|---|---|---|
| Any day | US–Iran talks through Qatar | The one development that could lower oil quickly. |
| 30 Sept | US PCE inflation for August | Decides whether the Fed raises rates again in October, and where US yields go. |
| 1 Oct | September GST collections, auto sales, LPG and jet fuel prices | The first reading of festive-season demand. |
| 2 Oct | US jobs report; India's reserves for the week to 25 Sept | Indian markets are closed for Gandhi Jayanti. The reaction comes on Monday 5 October. |
| 4 Oct | OPEC+ meeting | Output policy with Hormuz still restricted. |
| 7 Oct | RBI policy decision | A rise to 5.50% is the majority forecast. The tone on the rupee and liquidity matters as much as the rate. |
| From mid-October | July–September company results | Shows whether higher oil and interest costs have reached profits. |
More than ₹12 lakh crore of quoted value went in two sessions, and the cause was outside India: a rejected offer on Hormuz, oil at $108, US yields at a 19-year high and foreign funds selling ₹5,353 crore in a day. Inside India, factories grew 8% and domestic funds bought nearly everything foreigners sold. The market is 13.6% below its high, which is a correction. Whether it deepens depends mainly on oil, then on the RBI on 7 October. For a household, the useful questions are when the money is needed and whether the SIP can continue. The index level on a given Monday answers neither.
Frequently Asked Questions
Why did the Sensex and Nifty fall on 28 September 2026? Brent crude rose to nearly $109 after the US rejected Iran's offer to reopen the Strait of Hormuz. US 10-year bond yields reached a 19-year high of 5.27%, foreign investors sold ₹5,353 crore of Indian shares, and the rupee weakened past 96 to the dollar. Expectations of an RBI rate rise on 7 October added pressure on banks and property companies.
How much did investors lose? The value of all BSE-listed companies fell ₹8.88 lakh crore on Monday, from ₹483.25 lakh crore to ₹474.37 lakh crore. In early trade on Tuesday it fell to about ₹470 lakh crore, taking the two-day loss above ₹12 lakh crore. These are changes in quoted value. An investor who did not sell holds the same shares and units as before.
Did the government respond to the market fall? We found no official statement on the fall itself as of Tuesday afternoon. The government has held petrol and diesel prices, cut import duty on edible oils on 24 September, cut export duties on fuels from 16 September and reduced its borrowing for the second half of the year. The RBI has been selling dollars to slow the rupee's fall.
Should I stop my SIP? This site does not give investment advice. As a matter of arithmetic, a SIP buys more units when prices are lower, so stopping after a fall removes the instalments bought at the lowest prices. The decision should rest on when you need the money.
Is this a bear market? Not by the usual definition. The Nifty is 13.6% below its 52-week high. A fall of 10% is conventionally called a correction and 20% a bear market.
Sources
- Index closes, breadth and BSE market value: 5paisa post-market update, 28 September 2026; Stockpil India markets summary, 28 September; The Statesman, WION, Business Today, ETV Bharat and LatestLY reports of 28 September; Daily Pioneer (PTI) on the one-month fall.
- Tuesday 29 September intraday levels: Business Standard market live blog; Kotak Neo market update (9:53 am); HDFC Sky opening report; Trading Economics.
- Oil: CNBC and InvestingLive oil market recap, 28 September 2026; Trading Economics; Vantage Markets.
- US markets and yields: CNBC and Yahoo Finance market reports, 28 September 2026; TheStreet.
- Flows: provisional exchange data for 28 September as published by Stockpil and Strota; NSDL data as reported by Upstox, Outlook Money and Business Standard; EquityBrew week-ahead note.
- Rupee and bonds: Business Standard capital market news, 28 September; WION; Trading Economics on the 10-year government bond yield.
- RBI expectations: Reuters poll of 18–28 September as carried by inkl; The Hans India, 27 September.
- Economy: Ministry of Statistics IIP release as reported by ANI, The Tribune and Business Today, 28 September; ThePrint and Business Standard on the Maharashtra drought declaration, 26 September.
- Government measures: Business Today on fuel prices and ICRA's estimate, 28 September; APAC News Network on edible oil duties, 24 September; ETV Bharat on fuel export duties, 17 September; CNBC on bullion duties, 13 May; Gulf Business on the March excise cut; The Tribune on the borrowing calendar and forex reserves, 25 September.
- Earlier episodes: Business Today, Deccan Chronicle and Swarajya on 19 March 2026; NTV on 11–12 May 2026.
Fast-moving: prices and flows change within hours and provisional data are revised. Market value figures differ between reports because they are taken at different times. Educational analysis only — not investment, tax or legal advice.
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