HOME > MARKETS > MARKET COMMENTARY
  MARKET COMMENTARY
EQUITY
Rising domestic inflation, foreign fund outflows weigh on Indian markets
Sep-18-2026

Indian markets ended the holiday-shortened week lower amid foreign fund outflows and persistent inflation worries. This marks sixth consecutive week that markets have finished in red. Even though crude oil prices retreated from their recent peaks, they remained stubbornly above $100-per-barrel threshold. Traders were concerned over a rise in India’s retail and wholesale inflation.

Some of the major developments during the week are:

Retail inflation based on CPI jumps to 4.82% in August: Retail inflation, measured by the All-India Consumer Price Index (CPI) with the base year 2024, rose to 4.82% (Provisional) in August 2026 from 4.45% (Final) in July 2026, largely driven by higher food prices.

India’s WPI inflation climbs to 9.92% in August: India's wholesale price index (WPI) inflation rose in the month of August 2026 to 9.92 per cent, as compared to 9.78 per cent in July 2026, on rising prices of food, manufactured items, and fuel and power. 

India's current account deficit widens to $7 billion in July: Reserve Bank of India (RBI) in its preliminary data has showed that India's current account deficit widened to $7 billion in July 2026 from $3.2 billion in the year-ago month, primarily driven by higher merchandise trade deficit.

India's merchandise exports jump 26.10% in August: The commerce ministry data has showed that India’s merchandise exports rose by 26.10 per cent to $43.81 billion in August 2026 as compared to $34.74 billion in August 2025, driven by a jump in petroleum product shipments.

Moody’s raises India’s GDP growth forecast to 7% for FY27: Moody’s Ratings has sharply raised India’s Gross Domestic Product (GDP) growth forecast for FY27 to 7 per cent from its earlier estimate of 6 per cent, citing the country's resilience to global shocks arising from the conflict in the Middle East.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex slipped 486.80 points or 0.65% to 74,294.96 during the week ended September 18, 2026. On the sectoral front, S&P BSE Consumer Durables was down by 2,086.83 points or 3.35% to 60,245.85, S&P BSE Realty was down by 73.10 points or 1.10% to 6,556.27 and S&P BSE PSU was down by 182.84 points or 0.90% to 20,082.81 were the top losers, while S&P BSE Healthcare was up by 200.21 points or 0.39% to 51,438.34, S&P BSE Oil & Gas was up by 54.62 points or 0.21% to 25,651.06 and S&P BSE Fast Moving Consumer Goods was up by 30.13 points or 0.18% to 17,199.65 were the top gainers on the BSE.

NSE movement for the week

The Nifty declined 51.70 points or 0.22% to 23,346.40. On the National Stock Exchange (NSE), Bank Nifty was down by 247.85 points or 0.44% to 56,358.70, Nifty IT was down by 66.95 points or 0.23% to 28,854.55, Nifty Next 50 lost 58.30 points or 0.08% to 72,025.40 and Nifty Mid Cap 100 decreased 5.95 points or 0.01% to 62,191.25.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net sellers in equity segment in the week, with gross purchases of Rs 41,843.45 crore and gross sales of Rs 46,514.64 crore, leading to a net outflow of Rs 4,671.19 crore. They also stood as net sellers in the debt segment with gross purchases of Rs 2,802.68 crore against gross sales of Rs 14,128.95 crore, resulting in a net outflow of Rs 11,326.27 crore. In hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 110.07 crore and gross sales of Rs 78.47 crore, leading to a net inflow of Rs 31.60 crore. (Provisional)

Industry and Economy

Praising the resilience of the Indian economy, International Monetary Fund (IMF) Deputy Managing Director Nigel Clarke has said that India remains a key driver of global growth and continues to be the world’s fastest-growing major economy, supported by strong fundamentals and sound policy frameworks. Clarke recently visited India, where he held meetings with Finance Minister Nirmala Sitharaman, Reserve Bank of India (RBI) Governor Sanjay Malhotra, NITI Aayog Vice Chairman Ashok Kumar Lahiri, and business leaders. Clarke said his discussions with policymakers focused on India’s economic outlook, the evolving global environment, and policy priorities aimed at supporting sustainable and inclusive growth.

Outlook for the coming week

Benchmarks ended lower in the passing week amid ongoing geopolitical tensions. Meanwhile, a massive rush of new IPOs pulled cash out of the regular stock market.

In the coming week, on the economic data front, traders will be eyeing infrastructure output data to be out on September 21. Investors also waiting for HSBC Composite, Manufacturing & Services PMI Flash data to be released on September 23. Meanwhile, Foreign exchange reserves data is going to be out on September 25. Moreover, the 13th SBI Banking & Economics Conclave 2026 will take place on September 23 and 24, 2026 in Mumbai. It brings together India's top economic experts, financial minds, and industry leaders.

On the global front, investors would be eyeing economic data from United States (US) starting with Fed Goolsbee Speech, Chicago Fed National Activity Index on September 21, followed by Redbook, ADP Employment Change, Fed Williams & Jefferson Speech on September 22, API Crude Oil Stock, S&P Global Composite PMI Flash on September 23, Initial Jobless Claims on September 24, and Durable Goods Orders, Michigan Consumer Sentiment on September 25.

Top Gainers 

  • HDFC Bank up by 5.36% was the top gainer on Nifty for the week - Shares of HDFC Bank traded with traction supported by value buying as market participants opted to pick the stock at lower-level following recent losses. Meanwhile, government introduced a 0.4% fee on transfers worth more than Rs 2,000 made to merchants through UPI payments platform from October 15 and the banks are expected to be one of the key beneficiaries of this fee. 
  • HDFC Life Insurance up by 4.71% was another top gainer on Nifty for the week - HDFC Life Insurance traded higher along with other insurance sector stocks amid rising expectations that Insurance Regulatory and Development Authority of India (Irdai) in its consultation paper on insurance commissions and distribution may propose reduction in commissions paid to banks and individual insurance agents. The consultation paper is expected to be released soon.

Top Losers 

  • Coal India down by 5.12% was the top loser of the week on Nifty - Shares of Coal India faced selling pressure amid concerns over disruption in coal production. Recently, Union Coal Minister G Kishan Reddy had admitted that there were issues related to coal production due to weather conditions (monsoon).
  • Bajaj Finserv down by 4.53% was another top loser of the week on Nifty - Shares of Bajaj Finserv continued to experience profit booking following the gains made by the stock post its Q1 numbers. Meanwhile, the company reported a 12.31% rise in its consolidated net profit at Rs 3,132.35 crore for Q1FY27, as compared to Rs 2,789.05 crore for the same quarter in the previous year.

Technical viewpoints

During the week, CNX Nifty touched the highest level of 23,592.85 on September 15 and lowest level of 23,116.10 on September 16. On the last trading day, the Nifty closed at 23,346.40 with weekly loss of 51.70 points or 0.22 percent. For the coming week, 23,110.72 followed by 22,875.03 are likely to be good support levels for the Nifty, while the index may face resistance at 23,587.47 and further at 23,828.53 levels.

US Market

The U.S. markets traded mostly lower during the week after the Federal Reserve raised its benchmark policy interest rate by 25 basis points to 3.75%-4% for the first time in three years.

Some of the major developments during the week are:  

U.S. retail sales surge in August: Retail sales jumped by 1.2 percent in August after falling by a revised 0.5 percent in July. Street had expected retail sales to increase by 0.7 percent.

Jobless claims in U.S. dip in week ended September 12: Initial jobless claims fell to 196,000, a decrease of 10,000 from the previous week's unrevised level of 206,000.

Pending home sales in U.S. rise in August: National Association of Realtors said pending home sales index rose by 0.3 percent to 71.2 in August after tumbling by 2.6 percent to a revised 71.0 in July.

U.S. housing starts tumble in August: Housing starts tumbled by 2.6 percent to an annual rate of 1.309 million in August after plunging by 9.0 percent to a revised rate of 1.439 million in July.

Business inventories in U.S. climb in July: Business inventories climbed by 0.8 percent in July following a revised 0.1 percent uptick in June.

European Market

European markets traded higher during the week as the recent increase in crude oil prices paused and government bond yields eased from recent highs, boosted investors' willingness to take risk.

Some of the major developments during the week are:

UK retail sales unexpectedly rise in August: UK retail sales volumes rose 0.5% month-on-month in August 2026, defying market expectations of a 0.2% fall and rebounding from a 0.5% decline in July.

German producer inflation hits over 3-year high: Germany’s producer prices advanced 4.6% Y-o-Y in August 2026, marking 5th straight month of producer price growth and accelerating from July’s reading of 3.0% while surpassing market forecasts of 4.1%.

Bank of England keeps rates steady: The Bank of England’s Monetary Policy Committee voted 6-3 to keep Bank Rate unchanged at 3.75% at its September 16, 2026 meeting, in line with market expectations.

France August inflation at 2.4%: The annual inflation rate in France accelerated to 2.4% in August 2026, up from 2.1% in July and confirming preliminary estimates. This marked the highest reading in three months.

UK jobless rate unexpectedly holds at 4.9%: The UK unemployment rate was unchanged for the fourth consecutive period at 4.9% in the three months to July 2026, defying expectations that it would rise to 5.0%.

Asian Market

Asian markets, barring Nikkei composite index, traded lower during week even as oil prices and bond yields retreated amid optimism surrounding Saudi Arabia's efforts to reroute crude exports through Oman and restore the East-West pipeline.

Some of the major developments during the week are:

Japan trade deficit widens in August: Japan’s trade deficit widened significantly to JPY 1,105.6 billion in August 2026 from JPY 294.1 billion a year earlier, slightly below market expectations of JPY 1,052.6 billion.

Japan's core machinery orders contract 3.7% in July: Japan’s core machine orders fell by 3.7% month-on-month to JPY 1,016.9 billion in July 2026, slipping from a 9.7% gain in the previous month.

South Korea producer prices rise 0.2% in August: The Bank of Korea said producer prices in South Korea were up a seasonally adjusted 0.2% on month in August, following the 0.4% contraction in July.

China’s industrial output growth accelerates in August: China’s industrial production grew 5.2% year-on-year in August 2026, accelerating from a 4.5% rise in July and surpassing expectations of 4.8%.

Hong Kong jobless rate ticks up to 3.8%: Hong Kong’s seasonally adjusted unemployment rate edged up to 3.8% in the three months ending August 2026, from 3.7% in each of the previous five periods.
  RELATED NEWS >>
Most Viewed >>
EXPLORE
© CITRUS INTERACTIVE
Designed & Developed Accord Fintech Pvt. Ltd.