Indian stocks give negative 1-year returns while global markets rally

Indian stocks have struggled to deliver positive returns over the past year even as several major global markets recorded strong gains.

In one year, from October 1 to September 30, the Nifty 50 was down 8.9 per cent, while global indices such as the United States’ S&P 500, Nasdaq, Japan’s Nikkei, South Korea’s KOSPI, and the United Kingdom’s FTSE recorded substantial gains in the same period.

The weak performance of Indian equities has come amid foreign investor selling, geopolitical uncertainty, concerns over earnings growth, and fluctuations in crude oil prices.

Global markets outperform Indian stock market indexes

Recent market data shows a significant difference between Indian and some overseas equity markets.

Over one year, the Sensex declined by 10.4 per cent, while other indexes spiked.

The following are the returns given by various major indexes globally:

Why Indian indices have lagged

Foreign investment flows have been one of the major factors affecting Indian equities. During FY26, foreign portfolio investors withdrew nearly USD 19.7 billion from Indian equities.

Higher crude prices, geopolitical risks, and uncertainty over US interest rates have also affected investor sentiment. Rising bond yields in the US and other developed economies have added pressure on Indian equity valuations and made it more difficult for emerging markets to attract foreign capital.

September adds more pressure

In September 2026, Indian stock markets faced another sharp decline. During the month, Nifty 50 fell 6.1 per cent, while the Sensex declined 5.8 per cent as foreign investors sold USD 2.7 billion worth of Indian equities during the month.

During the month, the IT sector was among the weakest-performing major sectors.

On the other hand, technology and artificial intelligence-related companies have been an important factor behind the strong performance of some overseas markets. The US and South Korea, in particular, have benefited from their significant exposure to AI-related businesses.

For various reasons, Indian stock market benchmark indices have struggled to generate positive returns over recent periods while several overseas markets have recorded strong gains.