Sensex and Nifty Rally to End Weakest Samvat in 15 Years on a Strong Note

The Indian stock markets concluded Samvat 2082 with a notable rebound, as both the Sensex and the Nifty 50 recorded weekly gains of approximately 8.6 to 8.8 percent, marking their strongest weekly performance in close to six years. This late surge provided a positive finish to what was otherwise the weakest Samvat performance in 15 years.

Despite this encouraging rally, the broader picture for the year remained subdued. The Nifty 50 closed the Samvat 2082 period down by 3.1 percent, while the Sensex declined by 4 percent. These figures represent the worst annual performance for these indices since 2011, when they fell sharply by 17.4 percent. This downturn contrasted with the previous year, Samvat 2081, during which the Sensex and Nifty had achieved gains of 6.8 percent and 6.3 percent, respectively.

Dhiraj Relli, Managing Director and CEO of HDFC Securities, commented on the challenging market environment. He noted that the year tested Indian investors' patience due to multiple headwinds including elevated crude oil prices, geopolitical tensions in West Asia, disruptions from US tariffs, inflationary pressures, stretched stock valuations, and a global investment shift towards artificial intelligence-focused markets. These factors contributed to substantial foreign outflows, with approximately $31.3 billion withdrawn from Indian equities in 2026.

By late October, the market had experienced significant losses. The Sensex dropped by more than 10,750 points from its Diwali peak, and the Nifty had declined nearly 12 percent. However, optimism regarding potential revisions to long-term capital gains tax and steady corporate earnings helped to restore investor confidence. This sentiment recovery added nearly ₹4 trillion to the market capitalization during the recent upward movement.

The sustained pressure on domestic equities was largely linked to the outbreak of conflict in West Asia towards the end of February. The Nifty fell close to 22,200 points amid rising crude oil costs and concerns over disruptions near the Strait of Hormuz, a critical route for oil imports, which heightened worries about India's oil import reliance.

The market's late recovery was further supported by improving prospects for de-escalation between the US and Iran, following the US midterm elections. Additionally, investors began to question whether the global rally driven by artificial intelligence stocks could be maintained over the long term.

Looking beyond the headline indices, the broader market segments showed relative strength. The Nifty Midcap 100 ended the Samvat 2082 period with a 2.1 percent gain, though this was less than its 5.8 percent increase in the previous year. The Nifty Smallcap 100 also rebounded, posting a 4.2 percent rise after declining by 2.1 percent in Samvat 2081.

Sector-wise, some industries outperformed significantly. The Nifty Pharma, Metal, and Capital Markets sectors recorded impressive gains ranging from 22 to 25 percent. Conversely, sectors such as Information Technology, India Tourism, Cement, and Fast-Moving Consumer Goods (FMCG) saw declines between 7 and 17 percent.

Pankaj Pandey, Head of Research at ICICI Securities, highlighted that despite the year's volatility, the markets ended on a constructive note. He pointed out that the earnings of Nifty 50 companies in the second quarter of the 2026-27 fiscal year were solid, and valuations had moderated to about 17 times earnings, below their 10-year average. The global economic environment also improved, with foreign portfolio investors turning into net buyers as concerns over US Treasury yields and crude oil prices eased.

According to Pandey, the combination of renewed foreign investment, resilient corporate performance, and attractive valuations provides a favorable outlook for Indian equities. He added that a peaceful resolution to ongoing geopolitical conflicts could serve as an additional catalyst, potentially driving the markets to new highs in the upcoming Samvat.

This market performance illustrates the complex interplay of domestic and international factors influencing Indian equities. The volatility experienced during Samvat 2082 reflects broader global uncertainties and sectoral shifts, yet the recent recovery opens a window of opportunity for investors looking towards the future.