More than 20 Nifty 50 constituents are now trading over 20% below their recent highs, as multiple challenges on Dalal Street prompt investors to shy away from riskier assets. Crude oil prices have been a focal point for markets since late February, when the US and Israel launched joint strikes on Iran, triggering a war in the Middle East.
Higher energy prices caused global bond yields to spike to levels not seen in two decades, as investors started demanding higher compensation amid growing inflationary risks and widening government deficits. Back home, the falling rupee, persistent selling by overseas investors, and challenges in the rural economy have added more pressure, turning domestic equities into one of the worst performers among their Asian peers in 2026.

The sell-off spared no sector, with tech stocks continuing to bleed heavily, while bellwethers hovered near their Covid-era lows. FMCG, auto, and financial stocks were also severely hit in the sell-off. Nifty 50 plunged 6% in September, taking its 2026 decline to 14.2% and positioning it for its biggest annual decline since 2011, when it crashed 24.62%.
One in two Nifty 50 stocks sown over 20% from recent peaksAccording to Trendlyne data, 25 constituents in the index are now trading 20% to 40% below their recent highs. On Dalal Street, corrections are defined as losses of 10%, while bear markets are marked by drawdowns of 20% or more.

Infosys topped the chart as the tech major dropped 40% from its 52-week high of ₹1,728, marking one of the biggest reversals in recent times. ITC is also facing difficulties in attracting bulls, as the stock crashed by a similar 40% from its October 2025 high of ₹426.40.
Its closest peer, Hindustan Unilever, was also down 31.16% from its recent peak. TCS and HCL Technologies were other software majors that plunged 38% and 30%, respectively, from their recent peaks. Among other Tata Group stocks, including Trent, Tata Consumer Products, and Tata Steel, the stocks were also down 24.11%, 25.39%, and 20.68%.

Meanwhile, auto major Maruti Suzuki India also saw its shares slide 34.45%. Mahindra & Mahindra and Bajaj Auto were other auto majors that fell 25.52% and 20%, respectively. Jio Financial Services and HDFC Life Insurance were among other blue-chip majors that fell 33% and 32.25%, respectively, from their one-year peaks.
BSE, the recent entrant to the Nifty 50, which replaced Wipro, is trading 31.50% lower than the ₹4,446.80 level it touched in May. The country's most valuable firm, Reliance Industries by market capitalization, was also trading 27.55% lower than ₹1,611.80, which it had touched earlier this year.

Other stocks such as NTPC, Max Healthcare Institute, State Bank of India, Power Grid Corporation, Bharti Airtel, Hindalco Industries, and Cipla were also down between 20% and 24.5% from their respective one-year highs. Long-term investors can accumulate quality stocks: ExpertsWith market sentiment remaining fragile, analysts believe the next leg of the market will depend on a mix of domestic policy decisions, global economic data, corporate earnings, and geopolitical developments, and suggest that long-term investors accumulate stocks with solid fundamentals.
Vinod Nair, Head of Research at Geojit Investments, said, "The RBI policy decision will be the key domestic trigger, with pressure to support the rupee and contain imported inflation strengthening expectations of a rate hike."Meanwhile, India's PMI will indicate whether domestic activity is holding up against global headwinds, while US payrolls, PMI data, and FOMC minutes will shape Fed expectations and the direction of global yields.

With Q2 earnings expected to be softer than Q1, sentiment is likely to remain fragile. He pointed out that a meaningful de-escalation in West Asia could trigger a sharp relief rally. Until then, investors should stay selective, favoring earnings visibility and balance-sheet strength, while long-term investors may use market weakness to accumulate quality names gradually.
Kruti Shah, Quant Analyst, Equirus Securities, said, "Elevated crude, yields, and global liquidity remain key risks; however, continued weakness could increasingly create selective stock-specific opportunities as positioning and valuations reset. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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