Page 40 - Policy Economic Report - September 2026
P. 40
POLICY AND ECONOMIC
OIL & GAS MARKET
The market weakness was relatively broad-based, with 13 of 16 major sectors declining on 29 September.
Banking stocks fell around 0.4 per cent, while the IT index declined 1.5 per cent. Small-cap and mid-cap
indices also declined by around 0.8 per cent and 1 per cent, respectively. The market nevertheless
experienced considerable intraday volatility, with the Nifty briefly falling as much as 2.5 per cent during
the closing auction amid the monthly derivatives expiry.
The developments in equity markets are occurring alongside active measures by the Reserve Bank of India
to manage liquidity and foreign-exchange conditions. Reuters reported separately that RBI foreign-
exchange operations, including dollar-rupee sell-buy swaps and spot dollar sales, have absorbed an
estimated US$20 billion of excess rupee liquidity from the banking system during September. These
operations have contributed to a significant reduction in surplus liquidity while also influencing forward
foreign-exchange premiums.
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