What pulled the Nifty down 15% this year, and what turned it this week

The Nifty 50 began 2026 at 26,130, its close on 31 December 2025. On 8 October it closed at 22,232, 14.9% lower, after touching 22,180 during the day. That is a sharp fall for a market that had rarely paused in recent years, and it did not come from one shock but from five arriving together.

The five pressures

Crude oil. Brent crossed $108 a barrel in late September as tensions between the US and Iran disrupted shipping through the Strait of Hormuz. India imports most of its oil, so expensive crude raises the import bill, feeds inflation and squeezes company margins.

The rupee. A bigger import bill means more demand for dollars. The rupee weakened past 97 to the dollar on 8 October. For a foreign investor, a falling rupee shrinks returns measured in dollars.

Foreign selling. Foreign institutions sold a provisional ₹48,769 crore of Indian shares in October up to the 16th. Part of the money is going to AI-led rallies in markets such as the US, Taiwan and South Korea, where India has little exposure.

US bond yields. With US government bonds paying more than 5%, investors expect more from riskier markets, which pulls down the price they are willing to pay for Indian earnings.

Interest rates at home. On 7 October the RBI raised its repo rate to 5.50%, its first hike since February 2023, as inflation picked up.

What turned last week

In the week to 16 October the Sensex rose 3.11% to 74,729 and the Nifty 2.8% to 23,146, the best week in nearly six months. IT stocks led with an 11.7% jump, their strongest week in nearly 18 years, on solid quarterly results. A firmer rupee, softer crude, steady buying by Indian institutions and hopes for an India–US trade deal helped. The rally stayed with large companies; small-caps, FMCG and pharma lagged.

What it means if you invest through SIPs

Indian institutions, funded largely by monthly SIPs, bought almost exactly what foreign investors sold this month. SIP contributions reached a record ₹32,490 crore in September. A fall like this one means each instalment buys more units. Nobody can say where markets go next, and they will stay sensitive to oil, the rupee and global yields, but for long-term goals the habit of investing every month matters more than timing any single month.