The NIFTY Midcap 150 index experienced its sharpest decline in September, dropping nearly 7% and erasing almost 6% of gains from record highs made in August. According to Business Standard, the index has witnessed a sharper fall compared to the Nifty 50, which declined 6% and the Nifty Smallcap 250 that slipped 3.5% during the same period. The index, which registered a new high at 23,647.50 on August 26, 2026 on the NSE, now trades below its 200-day moving average at 21,870 levels. Over 87% or 131 out of 150 stocks show losses as of September 28, 2026, compared to a month earlier, according to ACE Equity data.
On the technical charts, the index broke its 200 EMA support level of 60,850 on Friday, suggesting a fresh breakdown. As reported by Upstox, a decisive close below this level opens the gates for the June swing low trendline support of 59,300. The index breadth for September indicates skewedness towards declines, with 80 out of 100 stocks trading in red on a monthly basis, while only 20 traded in green. Business Standard reports that the 200-DMA indicator helps determine bullish or bearish trends, with stocks or indices quoted above the average termed bullish and vice versa.
The top constituents of the index contributed significantly to the overall fall. According to Business Standard, PB Fintech (PolicyBazaar) leads the losers' pack, down 39% in September, following IRDAI's proposed lower commission on insurance selling. Other major contributors included KEI Industries (-17%), Godrej Properties (-21%), Suzlon Energy (-17%), IndusInd Bank (-9.1%), Coforge (-5.9%), Federal Bank (-4.9%), Hero MotoCorp (-5%), and Paytm (-3%). Additionally, shares of Godrej Properties, KEI Industries, Bharat Dynamics, Havells India, Premier Energies, and Suzlon Energy fell as much as 18% in the same period. A total of 32 stocks declined more than 10% this month, as reported by Business Standard.
The broader market indices extended their pullback from record high levels, with the Smallcap 250 dropping 3.5% during the same period. As reported by Business Standard, the NIFTY smallcap index has erased just 2% of gains from record highs as investors remained bullish on smallcap stocks. According to NSE's latest market pulse report, the top most covered 200 stocks could see a 9% drop in earnings growth, with consumer durable, building materials, chemicals, and automobile sectors facing margin impact from elevated crude oil prices. However, some stocks bucked the trend, with Patanjali Foods gaining 13%, Blue Star up 8%, and Jindal Stainless rising 6% during the month.
Market experts warn of potential further decline ahead. Gaurang Shah from Geojit Financial Services cautioned that the pain in the midcap segment could persist and get more aggravated if leveraged positions get unwound, stating the midcap index could slip another 5% if adverse conditions persist. Nandish Shah from HDFC Securities identified 21,550 as the key level to watch, noting that a break below this level could take the index to 21,230 levels. Ajit Mishra from Religare Broking recommended a buy-the-dips strategy, emphasizing that the correction comes after a sharp rally since April 2026, with the upcoming results season being key for momentum turnaround in bulls' favour.
