Sensex, Nifty lose up to 16% from record highs within a year; analysts turn cautious

Indian benchmark indices-Sensex and Nifty have corrected 16% and 14%, respectively from their record highs within a year. The 30-stock Sensex hit a record high of 86,159 on December 1 last year. It has fallen 13,630 points or 16% from that level. On similar lines, the Nifty50 is down 3,714 points or 14% from its record high of 26,373 reached on January 5, 2026.

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The investor sentiment can be gauged by India VIX, Nifty's fear index during the last one year. The index has surged 22% in the last one year, signaling heightened volatility in the stock market.

Why market is falling 

The ongoing West Asia War, rising bond yields, FII selloff and rising crude oil prices roiled investor sentiment on Dalal Street in the last one year.

On September 28 (Monday), Sensex and Nifty fell to a six-month low, extending a seven-week losing streak as oil prices rose after US-Iran peace talks hit a dead end.

The deadlock raised concerns over oil supplies via the Hormuz Strait, sending Brent crude futures to $108 a barrel.
 
India is the world's third-largest crude importer. It imports over 80% of crude oil it needs. Rising oil prices push inflation, widen the import bill and lead to a squeeze in the corporate margins.

Last week, Sensex and Nifty50 logged their seventh consecutive weekly decline, marking the longest losing streak since the 2020 pandemic correction.

Meanwhile, Sensex closed 49 points lower at 72,480 and Nifty lost 96 pts to end at 22,620 in the current session.

Sensex, Nifty outlook 

Here's a look at what analysts said on the outlook of the Indian stock market roiled by global factors.

Vinod Nair, Head of Research, Geojit Investments said, "The overall market tone remains cautious; investors continue to monitor the trajectory of crude oil prices, bond yields, inflation expectations, and the potential implications for global monetary policy. Consequently, market participants are likely to remain selective, favouring fundamentally strong businesses with resilient earnings profiles until there is greater clarity on the macroeconomic outlook."

Sudeep Shah, Vice President - Technical and Derivatives Research at SBI Securities said, "Going forward, the 22550–22500 zone could act as immediate support. A decisive move below this zone could trigger fresh selling pressure towards 22350. On the upside, 22790–22810 could act as an immediate hurdle. A sustained move above this zone could extend the pullback towards 22950. However, the broader structure remains weak, and sustained buying traction would be required for a meaningful recovery."

Vikram Kasat - Chief Business Officer – Advisory and Dealing at PL Capital said, "For October, investors should focus less on short-term index volatility and more on earnings visibility, domestic liquidity and sectors with stronger pricing power, while closely monitoring crude, the rupee and global rate expectations."

Ajit Mishra, SVP – research, Religare Broking said, "The 22,600 zone remains an important immediate support, followed by the 22,400 region, while 22,750–22,800 is likely to act as the immediate hurdle and 23,000 as the major resistance. With the index continuing to trade near six-month lows and broader market participation remaining weak, the near-term setup remains cautious, warranting a selective approach and close monitoring of the key support levels."