Sensex, Nifty set for worst 9-month show in 15 years: India

Indian equity benchmarks are on course to log their worst nine-month performance in 15 years, with the Sensex and Nifty facing sustained selling pressure across sectors. The slump marks a sharp reversal from the record highs seen earlier in the year and has left investors questioning whether the bull run has run out of steam. According to market analysts, the current drawdown reflects a combination of global headwinds, persistent foreign fund outflows, and valuation concerns that have weighed on sentiment since the start of the financial year.

The scale of the decline is significant. Over the past nine months, the Sensex and Nifty have erased a substantial portion of the gains accumulated during the previous rally. Analysts say that this is the worst nine-month stretch for the benchmarks since 2009, a period that included the aftermath of the global financial crisis. Domestic institutional investors have attempted to cushion the fall through consistent buying, but their support has not been enough to offset the selling pressure from foreign portfolio investors (FPIs).

Several factors have contributed to the prolonged weakness. Global central banks, particularly the US Federal Reserve, have maintained a hawkish stance for longer than anticipated, keeping interest rates elevated. This has prompted foreign investors to pull money out of emerging markets like India and redirect it to safer assets such as US Treasuries. Geopolitical tensions in West Asia and the ongoing conflict in Europe have further dampened risk appetite. On the domestic front, concerns over earnings growth, especially in the IT and banking sectors, have added to the gloom.

Analysts say the current correction is part of a broader global risk-off trend, and that Indian markets are not immune to the shift in capital flows. They note that while the long-term India growth story remains intact, near-term volatility could persist until global cues stabilise.

Retail investors, who had flocked to the markets during the pandemic-era rally, are now feeling the pinch. Many had entered at elevated levels, and the recent decline has eroded their portfolios. However, financial advisors suggest that this is not the time to panic. Systematic investment plans (SIPs) continue to see steady inflows, indicating that disciplined investors are using the dip to accumulate quality stocks at lower valuations. Analysts say that historically, such corrections have often been followed by strong recoveries, though the timing remains uncertain.

For those looking to navigate this turbulent phase, diversification and a long-term perspective are key. Investors should avoid making emotional decisions based on short-term market movements. Instead, focusing on fundamentally strong companies with healthy balance sheets and consistent earnings can help weather the storm. It is also important to review asset allocation and ensure that equity exposure aligns with one's risk tolerance and financial goals.

As the markets head into the final quarter of the year, all eyes will be on key events such as the US Federal Reserve's policy meetings, domestic inflation data, and the upcoming earnings season. Any positive surprise on these fronts could provide a much-needed breather to the bulls. Until then, caution is likely to prevail.

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