NSE cash market’s average daily turnover fell to a six-month low in September

Impact level

⚪ Background

What happened

A report dated October 10 says that India’s NSE cash market average daily trading value fell 4% month over month in September to 1.15 trillion rupees, its lowest level in six months, while trading value on the BSE rose 5%. Foreign portfolio investors recorded net outflows of $2.7 billion that month, bringing cumulative net outflows in 2026 to $26.8 billion. The Nifty and Sensex each fell 6% that month, declining for a second consecutive month. [1]

Seller impact

• InferenceAt the macro level, the report links capital outflows to rising U.S. bond yields and notes that higher oil prices threaten India’s growth outlook. However, lower trading value does not directly prove a contraction in consumption, while the BSE’s countertrend growth also limits the case for an overall market contraction. [1]
• InferenceAt the micro level, higher oil prices may raise input costs and squeeze Indian companies’ profits, indirectly affecting supplier quotes and orders. The material provides no data on sellers’ cost shares, exchange rates, or orders, so the effects on prices, cash flow, and inventory cannot be quantified, nor can pricing power be assessed. [1]

Evidence that would disprove the assessment

• Assessment 1：Review again over the next two weeks. If foreign investors shift to sustained net inflows and the main indices recover, the assessment that capital outflow pressures are continuing will weaken.
• Assessment 2：Verify again over the next two weeks. If the relevant suppliers’ input costs and quotes remain stable, the assessment that costs are being passed on to buyers will weaken.