Was September The Worst Nifty Derivatives Series In 25 Years? The Numbers Say No

The Nifty ended the 2026 September derivatives series about 5.70 per cent lower. A claim that this was the worst September series in 25 years has since spread across trading desks, messaging groups and social media. The data, however, does not support it.

Series performance is conventionally measured from the previous monthly expiry close to the current one. The August contract expired on August 27 with the Nifty at 24,090.85. The September contract settled on September 29 at 22,716.20. That is a fall of 1,374.65 points, or 5.70 per cent. The September 2020 series, which unfolded amid the Covid-19 pandemic, saw the Nifty fall from 11,559.25 on August 27, 2020, to 10,805.55 on September 24, 2020, a decline of 753.70 points, or 6.52 per cent. That is deeper in percentage terms than the latest series.

The Market Correction Is Still Significant

None of this takes away from the severity of the current sell-off. The pressure has been real and broad-based.

Brent crude has remained around $103 a barrel, the rupee has weakened past 96 to the dollar, and India’s 10-year government bond yield has risen to as high as 7.20 per cent, its highest level since April 2024. The US 10-year Treasury yield has also climbed above 5.20 per cent, adding to pressure on emerging-market equity flows. Foreign selling has compounded the weakness, with foreign portfolio investors (FPIs) offloading Indian equities worth Rs 25,662 crore so far this month through September 29.

The sell-off has now entered its eighth consecutive week. The Nifty has already posted seven straight weekly declines, its longest losing streak since 2020, and is on course for an eighth if it ends this week below last Friday's close of 23,140.50.

Prior to that, the Nifty’s longest losing streak came in 2001, when the index fell for nine consecutive weeks through April 13, shedding 27.10 per cent during the period. The sell-off came against the backdrop of the Ketan Parekh scam and the bursting of the dot-com bubble.

The historical comparison also needs to be viewed in the right context. Describing the decline in superlative terms can amplify anxiety when markets are already volatile, particularly among retail investors and traders. An expiry-to-expiry return is a specific measure of performance and, by itself, does not capture the broader risk in the market. This matters most in futures and options (F&O), where leverage magnifies the cost of a hasty decision. Incidentally, studies by the Securities and Exchange Board of India (Sebi) have consistently shown that a large majority of individual traders in equity derivatives incur losses, making disciplined position sizing and risk management particularly important during periods of heightened volatility.

Stock Market Outlook: From Here Where Will Nifty Go Now

History can provide context, but it cannot predict what happens next. After the September 2020 series, the Nifty recovered and ended the year near 14,000. This does not indicate where the index could go from here, but it shows that a sharp monthly fall does not always lead to a prolonged decline.

The latest correction could keep the market volatile in the early part of October, although the fall has also increased the possibility of a recovery from lower levels, according to Kkunal V Parar, vice-president of technical research and algo at Choice Broking.

“After the sharp fall we have seen in September, we expect October to remain volatile, at least in the initial part of the month. At the same time, after such a correction, we may also see some recovery from lower levels,” Parar said.

He said the key pressure points remain external, including crude oil, US Treasury yields, foreign selling, the rupee and geopolitical uncertainty.

“Right now, most of the pressure is coming from global factors — higher crude oil prices, elevated US bond yields, continuous FPI selling, weakness in the rupee and geopolitical uncertainty. So, for the stock market to see a meaningful recovery, we need some improvement on these fronts,” he said.

Technically, the market appears oversold in the short term, which leaves room for a relief rally. However, Parar said such a recovery would need broader participation and some easing in foreign selling to sustain.

“From a technical point of view, the market has corrected sharply and is looking oversold in the short term, so a relief rally is quite possible. But for that rally to sustain, we need better market breadth and some slowdown in FII selling,” he said.

Parar remains cautious on the near-term market trend but said the correction could throw up opportunities in select stocks. “So overall, we remain cautious on the market in the near term, but the recent correction may also create selective opportunities at lower levels,” he said.

What Could Trigger A Relief Rally In October

A cooling in crude prices, lower US bond yields, a slowdown in FPI selling and greater stability in the rupee could provide some relief to Indian equities, according to Parar. 

“There are a few things that can change the market mood in October. First is crude oil. India is highly dependent on crude imports, so if crude prices cool down from current levels, it would be a major positive for the market. It can also reduce some pressure on inflation and the rupee,” he said.

US bond yields will be another important factor to watch. “If US yields start cooling off, money could start moving back towards emerging markets. That would be positive for India as well,” Parar said.

Foreign flows could also play a key role in determining the strength of any recovery. “Third and probably one of the most important factors is FPI selling. FPIs have been continuously selling in the Indian market. Even if this selling slows down, we could see a decent recovery. If FPIs start covering their short positions, the recovery could be sharper,” he said.

The rupee could influence foreign investor sentiment as well. “Some stability in the rupee against the dollar would improve sentiment, particularly from the foreign investor side,” Parar said.

On the domestic front, the Reserve Bank of India’s (RBI) October 5-7 policy meeting will be closely watched for its assessment of inflation, crude prices, growth and interest rates. The start of the Q2 FY27 earnings season will also provide investors with fresh cues on corporate performance and management outlook.

“If corporate earnings remain healthy and management commentary is positive, we could see good stock-specific opportunities even if the broader market remains volatile,” Parar said.

“For October, crude oil, US bond yields, FPI flows and the rupee are the four major things to watch. If we see improvement in these factors, the market can witness a good relief rally from the current levels,” he said.