Weakest Samvat in 15 Years Ends on High as Sensex, Nifty Rally

A Late Rally Softens a Difficult Year for Indian Equities

A powerful final-week rebound lifted the Sensex and Nifty, but could not erase their weakest Samvat performance in 15 years.

A strong finish could not undo the annual losses

The late surge gave investors a more encouraging close to Samvat 2082, but the full-year picture remained weak. The Nifty 50 ended down 3.1 per cent and the Sensex fell 4 per cent. Both had declined 17.4 per cent in 2011, the last time their Samvat performance was worse. The result also reversed the gains of Samvat 2081, when the indices advanced 6.8 per cent and 6.3 per cent, respectively.

The gap between the sharp weekly advance and the annual losses is important: a forceful rebound can improve sentiment without, on its own, confirming a lasting change in market direction. By late October, the Sensex had shed more than 10,750 points from its previous Diwali levels, while the Nifty was down nearly 12 per cent, underscoring the scale of the recovery required.

Oil and geopolitics weighed on risk appetite

The downturn gathered pace after conflict in West Asia broke out towards the end of February. Rising crude prices and disruption concerns around the Strait of Hormuz pushed the Nifty close to 22,200, raising worries about the exposure of an oil-import-dependent economy to a prolonged supply shock. Elevated crude, inflation concerns, US tariff disruption and stretched valuations added to investor caution.

Foreign selling added another source of pressure. HDFC Securities’ Dhiraj Relli cited about $31.3 billion of foreign selling from Indian equities in 2026, alongside global investment flows favouring artificial-intelligence-led markets. The recovery, meanwhile, coincided with hopes of easing US-Iran tensions and growing questions about the sustainability of the global AI investment rally. These were supportive shifts in sentiment, not proof that geopolitical or global-market risks had disappeared.

Broader shares and sectors took different paths

Performance beyond the headline indices was mixed. The Nifty Midcap 100 rose 2.1 per cent, below its 5.8 per cent gain in the previous Samvat, while the Nifty Smallcap 100 advanced 4.2 per cent after declining 2.1 per cent a year earlier. Their gains suggest the weakness was not uniform, though they do not remove the risks associated with broad market volatility.

Pharma, metals and capital markets led sector performance, gaining 22–25 per cent. Information technology, India Tourism, cement and FMCG were among the weakest, falling 7–17 per cent. Such divergence highlights why benchmark returns alone may not describe an investor’s experience: outcomes depended substantially on sector and portfolio exposure.

Earnings and foreign flows will test the recovery

ICICI Securities’ Pankaj Pandey pointed to robust second-quarter earnings for Nifty 50 companies, valuations of around 17 times—below their 10-year average—and foreign portfolio investors returning as net buyers. Easing concerns over US Treasury yields and crude prices also contributed to a more supportive global backdrop. These factors may help sustain confidence if they persist, but improving sentiment still needs to be matched by continued earnings resilience and stable external conditions.

A resolution to the geopolitical conflict could provide another catalyst, Pandey said. For investors, however, the prospect of fresh market highs remains conditional: crude prices, foreign flows and the durability of corporate earnings are among the factors that could shape whether the rebound broadens or fades.

Key Highlights

• The Sensex and Nifty 50 gained 8.6–8.8 per cent in the final week, their biggest weekly rise in nearly six years.
• For Samvat 2082, the Nifty fell 3.1 per cent and the Sensex declined 4 per cent.
• Midcaps gained 2.1 per cent and smallcaps 4.2 per cent, while sector performance varied widely.
• Pharma, metals and capital markets rose 22–25 per cent; several other sectors fell 7–17 per cent.
• Robust earnings, moderated valuations and returning foreign buyers offered support, while geopolitical and crude-price risks remained relevant.

Investor Note: The closing rally improved the tone but does not erase the year’s losses or guarantee a sustained advance. Investors may want to weigh earnings and valuation support against exposure to crude prices, geopolitical developments and changing foreign flows.