NIFTY 50 touched record highs in September 2024 and January 2026, yet investors entering near the 2024 peak saw limited returns amid repeated rallies and corrections.
Correction Turns Broader
The recent decline has moved beyond a sideways phase, with large-caps, mid-caps and small-caps all facing selling pressure.
Global Factors Add Pressure
Banks and NBFCs would not be allowed to make insurance compulsory for loan approval. Volume-linked and reward-linked incentives for insurance-selling employees could also face restrictions.
Earnings vs Valuations
Over two years, NIFTY 50 EPS growth was in single digits, while price growth was -6.85%. After the sell-off, the index trades around 19.2x P/E, closer to its five-year lows.
Sector Rotation Underway
Banking, IT, Auto, FMCG, Pharma and Metals are facing different challenges, pointing to changing investor preferences across sectors.
Price Correction or Time Correction?
The past two years show characteristics of a time correction, while the recent two-month decline has added a stronger price-correction element. Future earnings will be important to watch.
Explore the key market drivers, global and domestic factors, earnings trends, valuations and indicators investors should monitor in the coming quarters. Read the full blog.