Indian markets tumbled on Wednesday as the Sensex crashed 956 points and the Nifty shed 306 points amid global rate concerns, according to reports.

September was brutal for equities: the Sensex and Nifty recorded their steepest monthly decline since March. Foreign investors withdrew $2.7 billion from Indian equities during the month, extending the selling pressure.

The trigger is rates. With energy prices spiking because of the Middle East war, most major central banks have started raising rates or are considering it. A majority of economists polled by Reuters expect the Reserve Bank of India to raise its repo rate by 25 basis points to 5.50% at its October 5-7 meeting — the first hike since 2023.

Inflation accelerated to 4.82% in August, above the RBI’s 4% target for the third straight month, driven by higher energy and food costs. The rupee has weakened about 6% this year.

For investors, the message is caution: global tightening, sticky inflation and FII outflows are weighing on sentiment even as India’s growth stays robust.