Investors tracking Indian equities faced a challenging year, with benchmark indices like the Nifty 50 and Sensex recording negative returns between October 1, 2025, and September 30, 2026. This starkly contrasts with robust performances seen across major global markets, which posted substantial gains over the same twelve-month period.
Over the past year, the Nifty 50 declined by 8.9 percent, while the Sensex dropped 10.4 percent. In comparison, several international indices delivered impressive growth: the United States' S&P 500 rose 14.01 percent, and its Nasdaq surged by 21.73 percent. Japan's Nikkei 225 saw a remarkable 49.83 percent increase, South Korea's KOSPI posted an exceptional 97.86 percent gain, and the United Kingdom's FTSE climbed 12.27 percent.
Several factors contributed to India's underperformance. Foreign portfolio investors (FPIs) withdrew approximately USD 19.7 billion from Indian equities during FY26. Geopolitical uncertainties, fluctuating crude oil prices, and concerns regarding corporate earnings growth also weighed heavily on investor sentiment. Additionally, rising bond yields in the US and other developed economies made it harder for emerging markets like India to attract foreign capital, putting pressure on equity valuations.
September 2026 brought further pressure on Indian markets. During the month, the Nifty 50 declined 6.1 percent, and the Sensex fell 5.8 percent, as FPIs intensified selling, offloading USD 2.7 billion worth of Indian equities. The information technology (IT) sector emerged as one of the weakest performers during this period.
In contrast, technology and artificial intelligence (AI)-related companies significantly fueled the strong performance of several overseas markets. The US and South Korea, in particular, benefited from their considerable exposure to these innovative sectors, driving their indices to substantial gains.
Image: siasat.com
đź“° Source: Siasat Gulf