Navratri Cheer Eludes D-Street Since 2022 — What Led To Slump This Year

Navratri, often seen as an auspicious period for investors, has turned out to be a season of gloom for Indian equity markets for the fourth consecutive year. Since 2022, both the Sensex and Nifty have consistently ended the festival week in the red, reversing the trend of strong festive cheer that markets enjoyed until 2021.

In 2025, Sensex slipped 1.99% and the Nifty lost 1.94% over the eight trading sessions of Navratri. The weakness extended a pattern of declines seen in 2024 of 3.42% for Sensex and 3.23% of Nifty.

In 2023 Nifty and Sensex fell 2.48% and 2.38%, respectively and in 2022 Nifty was down 0.06% and Sensex fell 0.31%. The last time the festival period brought cheer was in 2021, when both benchmarks delivered returns of over 3.5%.

The slump was driven by multiple factors. Investor sentiment remained weak due to concerns over higher US tariffs, expensive stock valuations, and slower-than-expected earnings growth.

The drag was compounded by heavy foreign outflows: overseas investors pulled a net Rs 17,000 crore from Indian equities in the first six trading days of Navratri 2025, according to NSDL data.

Adding to the pressure, benchmark indices fell for seven straight sessions during the period, before staging a mild rebound on Oct. 1. The recovery came after the Reserve Bank of India kept interest rates unchanged and signaled that easing may be on the horizon to support growth. The central bank also raised its fiscal 2026 growth forecast to 6.8% and lowered its inflation estimate to 2.6% on expectations of stable food prices.

Despite the final-day rally, the overall tone of Navratri trading this year underscored the fragile market mood. With global uncertainties, high US tariffs, foreign outflows, and structural challenges in key sectors like IT, festive optimism failed to translate into stock market gains. Unless earnings momentum improves and global headwinds ease, investors may need to temper their expectations for seasonal market rallies.

Mid- and small-cap indices fared worse this year. While the Nifty MidCap 100 shed 3.49%, the Nifty SmallCap 100 plunged 4.05%, compared with the Nifty’s 1.94% fall. Historically, mid- and small-caps have seen sharper swings around Navratri, and 2025 was no exception.

Sector-wise, the damage was widespread. Only Nifty PSU Bank, which rose 1.37% and Nifty Metal that was up 1.03% ended in the green, while all other sectoral indices fell.

Nifty IT bore the heaviest blow, plunging 7.31%, hit by fresh headwinds from the US. The H-1B visa fee increase — with a steep $100,000 charge on new petitions — is set to impact Indian IT companies, particularly TCS, which ranks among the largest visa recipients.

Nifty Realty and Pharma also posted steep declines of over 5% and 4%, respectively. Nifty Auto, Bank, and FMCG on the other hand logged more moderate losses.