The Nifty50 decline reached 13.1% for 2026 through October 26, leaving India’s benchmark behind most major global peers in the comparison. A roughly 5.6% fall in the rupee against the US dollar added to losses for dollar-based investors, while lower equity valuations have not erased India’s premium over many international markets.
Key Takeaways
- The Nifty50 fell 13.1% through October 26, contrasting with strong gains across several Asian and other major benchmarks.
- Its price-to-earnings ratio dropped to 20.4 from 24.45 at the end of 2025, but remained above Japan’s Nikkei.
- Foreign equity selling and rupee depreciation have added to the challenges facing overseas investors.
Table of Contents
- Nifty50 decline contrasts with global gains
- Lower valuations have not eliminated India’s premium
- Foreign selling adds a currency dimension
- Conclusion
Nifty50 decline contrasts with global gains
India’s equity weakness stands out against advances in Taiwan, South Korea, Brazil, Japan and the United States. Among the benchmarks compared, only Indonesia’s JCI, down 38%, performed worse than the Nifty50.
Taiwan’s TWSE led the group with a 59% gain. The gap shows that India’s losses were not part of a uniform global equity retreat: investors faced markedly different outcomes across markets during the same year-to-date period.
| Item | Details |
|---|---|
| Taiwan TWSE | Up 59% in 2026 through October 26 |
| South Korea KOSPI | Up 29.8% |
| Brazil Ibovespa | Up 27.3% |
| Japan Nikkei | Up 23.5% |
| US S&P 500 | Up 11.4% |
| Indonesia JCI | Down 38% |
Lower valuations have not eliminated India’s premium
The Nifty50’s price-to-earnings ratio fell to 20.4 on October 26 from 24.45 on December 31, 2025. That represents a substantial reduction in the multiple investors were paying for earnings.
Even after that adjustment, the Indian benchmark remained slightly more expensive than Japan’s Nikkei, at 19.9 times earnings. Taiwan and the United States carried higher multiples of 26 and 26.1, respectively.
A falling multiple alone does not establish that a market is attractive. Investors also weigh earnings prospects and returns available elsewhere, so the valuation adjustment should be distinguished from evidence of renewed foreign demand.
Foreign selling adds a currency dimension
Chintan Hefa, executive director at Grant Thornton Bharat, said foreign portfolio investors had net sold about ₹3.1 lakh crore of Indian equities during 2026 through October 23. He also cited elevated crude prices as a source of currency pressure.
CDSL’s calendar-year FPI investment methodology explains that its series uses reports submitted to SEBI or depositories by designated depository participants and custodians, covering trades through previous trading days. This describes how the investment data are compiled; it does not independently establish the quoted cumulative outflow.
The rupee depreciated 5.58% against the dollar over the year to date. For an unhedged dollar-based investor, that currency movement adds a separate loss when rupee-denominated equity holdings are converted into dollars.
“The common factor is FPI selling affecting indices and currency. Earnings have only improved recently,” said Madan Sabnavis, chief economist at Bank of Baroda.
Conclusion
The October 26 snapshot leaves India with lower equity multiples but weak returns relative to most benchmarks compared. Subsequent foreign-flow readings will be important for assessing whether the selling pressure has eased; the valuation correction alone does not establish a turnaround.
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Disclaimer
This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.
