FY26 set to be worst year in a decade for markets, but history offers hope

The Nifty is set to end FY26 down over 5%, marking its worst performance in a decade, excluding the COVID-hit year, and snapping a two-year positive streak. The headline fall suggests a weak year, but the underlying trend is far more split.Even as the index declined, gains and losses were nearly evenly balanced. As many as 15 Nifty stocks delivered returns of over 10%, while 16 fell more than 10%, pointing to strong divergence within the market.
Sector trends reflect the same divergence. Realty fell about 21%, information technology dropped nearly 20%, and fast-moving consumer goods declined over 13%. On the other hand, public sector banks gained more than 30%, metals rose over 20%, and auto stocks advanced around 14%.
At the stock level, names like Shriram Finance, Bharat Electronics, State Bank of India, Titan and Ashok Leyland were among the top performers. On the losing side, Trent fell about 36%, Tata Consultancy Services dropped 34%, ITC declined 28%, Wipro slipped 27%, and InterGlobe Aviation fell around 20%.The broader market saw even sharper moves, with several midcap stocks rallying strongly while others corrected steeply, reinforcing the split beneath the headline index move.

History offers some context. In previous cycles, years of negative returns have often been followed by strong rebounds, keeping the focus on how FY27 could unfold from here.