Sensex Plunges for Fourth Day, Manufacturing PMI Hits 7-Month High

Key highlights

• Nifty 50: Closed down 198.50 points (0.88%) at 22,421.95, extending losses for the fourth straight day.
• Sensex: Fell 570.59 points (0.79%) to settle at 71,909.70, reflecting broad-based selling pressure.
• Manufacturing PMI: India's HSBC Manufacturing PMI rose to a seven-month high of 55.1 in September, up from 52.8 in August.
• India VIX: Spiked over 12% to 15.15, signalling increased market volatility and investor anxiety.
• Indian Rupee: Weakened by 3 paise to 95.97 against the US dollar in early trade, with RBI intervention noted.

Indian Markets Extend Losses Amid Global Headwinds and FII Outflows

Indian benchmark equity indices, the Sensex and Nifty, concluded Thursday's trading session with significant declines, marking the fourth consecutive day of losses. The BSE Sensex shed 570.59 points, or 0.79%, to close at 71,909.70, while the NSE Nifty 50 fell 198.50 points, or 0.88%, to settle at 22,421.95. Earlier in the day, the market witnessed even sharper corrections, with the Sensex plunging over 1,200 points and the Nifty briefly dipping below the 22,200 mark, reflecting a broad-based risk-off sentiment among investors.

The downturn was attributed to a confluence of factors, including persistent outflows by Foreign Institutional Investors (FIIs), elevated crude oil prices, and global uncertainties. FIIs were net sellers of equities worth ₹10,148.41 crore on Wednesday, contributing significantly to the negative sentiment. The India VIX, a measure of market volatility, surged over 12% to 15.15, indicating heightened investor anxiety. Sectorally, the Nifty Auto index was among the worst performers, crashing more than 4%, with stocks like Bajaj Auto and Maruti Suzuki experiencing notable declines. Conversely, some banking and IT stocks, including HDFC Bank, Infosys, Kotak Mahindra Bank, HCL Technologies, and TCS, managed to post gains, providing some cushion to the broader market fall. The market breadth remained sharply negative, with a significantly higher number of declining stocks compared to advancing ones on the NSE.

Key numbers

• Sensex Close: 71,909.70 (down 0.79%)
• Nifty Close: 22,421.95 (down 0.88%)
• India VIX: Spiked over 12% to 15.15
• FII Outflows (Wednesday): ₹10,148.41 crore
• Nifty Auto: Down over 4%

Why it matters

The continued market correction highlights investor concerns over global macroeconomic conditions, particularly the impact of high crude oil prices on India's import bill and inflation, as well as the implications of sustained FII selling. The sharp rise in volatility suggests that investors are bracing for further fluctuations, making cautious positioning a priority. The divergence in sectoral performance indicates that while some segments face headwinds, others, like parts of the IT and banking sectors, are showing resilience.

India's Manufacturing Sector Shows Robust Growth, PMI Hits 7-Month High

In a contrasting development to the equity market's performance, India's manufacturing sector demonstrated strong expansion in September, with the HSBC India Manufacturing Purchasing Managers' Index (PMI) rising to a seven-month high of 55.1. This marks a significant increase from 52.8 recorded in August, indicating a robust recovery in factory activity.

The latest PMI data, released on Thursday, October 1, 2026, highlighted accelerating new orders, increased output, and a solid expansion in factory hiring. Strong domestic and export demand were key drivers behind this upward momentum. Export orders, in particular, expanded at a quicker pace, with firms reporting stronger demand from clients in Brazil, Europe, the UAE, and the US. Business optimism among manufacturers also reached a four-month peak, suggesting positive sentiment regarding future sales and production. The pace of job creation was the strongest since May, recovering from a decline in the previous month, which was the first drop in factory jobs in two-and-a-half years. While input costs and selling prices saw quicker increases, the rates of inflation remained mild by historical standards. The PMI, compiled by S&P Global, remained comfortably above the 50-mark, which separates expansion from contraction, signalling a healthy and growing manufacturing base.

Key numbers

• September PMI: 55.1
• August PMI: 52.8
• High: Seven-month high for manufacturing activity
• Job Creation: Fastest pace since May

Why it matters

The strong manufacturing PMI data provides a positive counter-narrative to the current market volatility, indicating underlying strength in the Indian economy. Robust demand, both domestic and international, coupled with increased hiring and business optimism, suggests that the manufacturing sector is on a firm footing. This economic resilience could act as a buffer against global headwinds and support long-term growth prospects for India.

More stocks and market news

Adani Group: Major Data Centre and Port Expansion Plans

The Adani Group is significantly expanding its infrastructure footprint with plans to operationalize three new one-gigawatt (1GW) data centres in Navi Mumbai, Hyderabad, and Vizag. These facilities are designed to serve major hyperscaler clients such as Amazon Web Services (AWS), Microsoft, and Google. Furthermore, the Odisha government has approved a substantial investment of ₹1.42 lakh crore for Adani's data centre and AI-related projects in the state. In a separate development, Adani Ports and Special Economic Zone (APSEZ) inaugurated the Phase II expansion of its Colombo West International Terminal (CWIT), doubling its capacity to 3.2 million TEUs with a USD 750 million investment. This expansion aims to handle nearly 25% of the Port of Colombo's targeted capacity by 2028, reinforcing Adani's position in regional logistics.

NSE: SEBI Nod for Corporate Bond Index Futures

The National Stock Exchange of India (NSE) has received a No Objection Certificate (NOC) from the Securities and Exchange Board of India (SEBI) for the introduction of futures contracts on a Corporate Bond Index. This move is aimed at providing market participants with an exchange-traded tool for managing corporate bond market risk, facilitating portfolio hedging, and enhancing price discovery. While SEBI's approval is a significant step, the introduction of these futures contracts remains subject to the requisite approval from the Reserve Bank of India (RBI). This initiative is expected to play a crucial role in strengthening India's corporate bond derivatives ecosystem and promoting deeper, more liquid debt markets.

Indian Rupee: Weakens Against Dollar Amid FII Outflows

The Indian Rupee (INR) experienced a weakening trend against the US dollar (USD) in early trade today, falling 3 paise to 95.97. This depreciation was primarily driven by ongoing dollar demand from state-run oil companies and sustained foreign portfolio outflows. However, aggressive foreign exchange intervention by the Reserve Bank of India (RBI), acting through state-run banks, helped to cap further losses and prevent the exchange rate from breaching the 96.00 threshold. The dollar index, which measures the greenback's strength against a basket of six currencies, was trading higher, further pressuring emerging market currencies like the rupee.

Market context

Indian benchmark indices, the Sensex and Nifty, closed significantly lower today, extending their losing streak for the fourth consecutive session. The Sensex fell 0.79% to 71,909.70, and the Nifty declined 0.88% to 22,421.95. The broader markets also saw declines, with the Nifty MidCap and SmallCap indices falling. The India VIX surged over 12% to 15.15, reflecting increased market apprehension. Sectorally, Nifty Auto was a major laggard, while Nifty IT showed relative resilience. Globally, markets presented a mixed picture, with US markets closing lower on Wednesday and Asian markets subdued today. Brent crude oil prices remained elevated at $97.3 per barrel, contributing to concerns over India's import bill. The Indian Rupee weakened to 95.97 against the US dollar, despite RBI intervention.

Why these stories matter

The market's four-day losing streak, fueled by FII outflows and global uncertainties, underscores the fragile investor sentiment and the impact of external factors on Indian equities. This contrasts sharply with the robust manufacturing PMI data, which points to underlying economic strength and resilience in the industrial sector, offering a glimmer of hope amidst market gloom. Adani Group's significant investments in data centres and port infrastructure highlight continued corporate confidence and growth in critical sectors, potentially boosting long-term economic prospects. The NSE's progress with corporate bond index futures is a crucial step towards deepening India's financial markets, offering new tools for risk management. Lastly, the rupee's depreciation, despite RBI intervention, signals ongoing pressure from dollar demand and foreign fund movements, a key macro indicator for investors.

What to watch next

• RBI Monetary Policy Review: Investors will closely monitor any upcoming statements or actions from the RBI regarding inflation, interest rates, and currency management.
• Global Crude Oil Prices: Continued volatility in crude oil prices and geopolitical developments in the Middle East will remain a key determinant for market sentiment and India's economic outlook.
• FII Investment Trends: The trajectory of foreign institutional investment flows will be crucial for market direction in the coming sessions.
• Corporate Earnings Season: Upcoming quarterly results from major Indian companies will provide further insights into corporate health and future growth prospects.
• RBI Approval for Bond Futures: The final approval from the RBI for NSE's corporate bond index futures will be a significant milestone for the fixed income market.

Sources

• The Hindu: India's manufacturing sector growth hits seven-month high in Sept. 2026 on strong demand: PMI
• Indiatimes: Stock Market Today Live Updates: Sensex drops 570.59 points at closing; Nifty tanks to 22,421.95
• Adani.com: APSEZ's Colombo West International Terminal Doubles Capacity to 3.2 million TEUs with Total USD 750 Million Investment
• Tribune India: NSE gets SEBI nod for proposed Corporate Bond Index Futures
• HDFC Sky: INR vs USD Rate, October 1, 2026: Rupee Falls 3 Paise to 95.97 Against Dollar in Early Trade

FAQ

1. Why did the Indian stock market fall today?

The Indian stock market fell today for the fourth consecutive session due to a combination of factors including significant Foreign Institutional Investor (FII) outflows, elevated crude oil prices, and broader global market uncertainties.

2. What is the HSBC India Manufacturing PMI, and what does 55.1 mean?

The HSBC India Manufacturing Purchasing Managers' Index (PMI) is a monthly survey that measures the health of the manufacturing sector. A reading of 55.1 in September indicates a strong expansion in manufacturing activity, as any figure above 50 signifies growth.

3. What are Adani Group's latest infrastructure investments?

Adani Group announced plans to operationalize three new 1GW data centres in Navi Mumbai, Hyderabad, and Vizag, with the Odisha government approving ₹1.42 lakh crore for data centre and AI projects. Additionally, Adani Ports expanded its Colombo West International Terminal, doubling its capacity to 3.2 million TEUs with a $750 million investment.

4. What is the significance of SEBI's nod for NSE's Corporate Bond Index Futures?

SEBI's No Objection Certificate (NOC) for NSE's Corporate Bond Index Futures is a significant step towards developing India's fixed income market. It aims to provide market participants with new tools for risk management, portfolio hedging, and price discovery, although it still requires RBI approval.

5. How did the Indian Rupee perform today?

The Indian Rupee weakened by 3 paise against the US dollar in early trade, reaching 95.97. This was influenced by dollar demand from state-run oil companies and FII outflows, though RBI intervention helped to limit further depreciation.

Disclaimer: This article is for educational purposes only. It does not constitute investment advice. Please consult a SEBI-registered financial advisor before making investment decisions.