Nifty faces recovery challenges after 9 per cent slide since last Diwali
Analysts suggest year-end gains are possible despite risks from crude oil prices and foreign investor outflows.
The Nifty index has dropped more than 9 per cent since last Diwali, according to a report by The Economic Times. The benchmark has also declined by approximately 12 per cent since the start of 2026, driven by geopolitical tensions, rising crude oil costs, and significant selling by foreign investors.
Overseas funds have exited Indian equities at a record pace, with sales amounting to about $31.3 billion in 2026. This trend was influenced by currency weakness, higher global bond yields, and a shift in investment towards artificial intelligence sectors in South Korea and Taiwan.
On November 2, the Nifty rose by 1.68 per cent, or over 388 points, following a rally in Reliance Industries and a dip in oil prices. To reach the level of 25,868.60 recorded last Diwali, the index must climb about 10.4 per cent from its November 2 close.
Avinash Gorakshakar, founder of Avinash Mentor Research, said positive returns could occur in November and December, though the market faces macroeconomic risks. He noted that September-quarter corporate earnings and domestic institutional investments could support a recovery.
Paresh Bhagat, chairman of Mangal Keshav, said a sustained rebound is uncertain. He noted that while oversold conditions might help, the market's direction depends on geopolitical developments, corporate earnings, and foreign institutional flows.
Abhinav Tiwari, senior research analyst at Bonanza, expects a gradual recovery rather than a sharp rebound. He said improving corporate earnings and festive consumption could provide support, though the upcoming US midterm elections may cause fresh volatility.