Average daily cash trading on the National Stock Exchange fell to a six-month low of ₹1.15 lakh crore in September, as foreign investors withdrew ₹35,861 crore. Rising global bond yields and volatile crude oil prices continue to drive capital away from emerging markets, impacting domestic indices.
Trading activity on the National Stock Exchange (NSE) saw a notable decline in September 2026, with average daily turnover in the cash segment dropping to ₹1.15 lakh crore. This 4% decrease from the previous month marks the lowest level of daily trading volume seen in six months, reflecting a cautious environment among investors.
The slowdown in trading corresponds with a consistent exit by foreign portfolio investors (FPIs). In September alone, FPIs were net sellers of ₹35,861 crore worth of Indian equities. This trend is part of a larger, persistent withdrawal throughout the year, with total outflows for 2026 reaching approximately $26.8 billion. This level of selling has significantly impacted market liquidity and contributed to a 6% decline in both the Nifty 50 and BSE Sensex during the month.
Global macroeconomic factors are the primary drivers behind this capital rotation. Higher yields on US bonds have made safer assets in the United States more attractive to global funds, reducing the appetite for riskier emerging market equities. Additionally, elevated crude oil prices remain a concern, as they can lead to inflationary pressures and tighter monetary conditions, which typically squeeze profit margins for Indian companies.
Operational changes have also influenced market dynamics. The implementation of the new Closing Auction Session (CAS), introduced on August 3, 2026, for F&O-eligible stocks, has led to shifts in price discovery at the end of the trading day. This transition period has introduced higher volatility in index tracking and settlement, causing some traders to reduce their activity while they adjust to the new mechanism.
The National Stock Exchange’s own shares, which debuted on the stock market on September 24, 2026, at an issue price of ₹1,785, have also experienced volatility consistent with the broader market trend. With indices under pressure and FPIs continuing to reposition their capital, domestic investors are increasingly focusing on capital preservation. The outlook for the coming months will likely hinge on whether global bond yields stabilize and if domestic corporate earnings can maintain their resilience despite the ongoing input cost pressures.