India's Nifty50 index down 10% in 2026 due to bank and IT sector losses
Foreign investors withdrew ₹14,000 crore in September while banks lost 5% and the IT sector dropped 21%, preventing a durable recovery.
The benchmark Nifty50 index fell nearly 10% in calendar 2026 because major sectors failed to rebound. Foreign institutional investors pulled out roughly ₹14,000 crore from Indian equities in September following previous inflows of nearly ₹50,000 crore in earlier months. Rising global bond yields and higher crude oil prices added pressure to emerging market funds.
Nifty Bank dropped about 5% during the same period, while Nifty IT underperformed significantly with a 21% decline. HDFC Bank, which holds 9.85% of the index's weightage, contributed the most to losses as its value fell 29%. Financial services represented 36.47% of total market weightage in 2026.
Analysts note that foreign money returning and bond yields easing would not automatically restore market performance unless banks and IT begin participating. These two sectors combined accounted for nearly 45% of the index's value, with IT carrying an 8.48% share. N ArunaGiri, founder of TrustLine Holdings, stated it remains difficult for indices to deliver meaningful results without this participation.
Banks face near-term earnings impacts from policy changes while IT grapples with global demand shifts. The market lacks a clear path to recovery until these heavyweight groups stabilize.
