The Nifty 50's 20-year compounded annual growth rate has fallen below 10% for the second time in history, as a sharp correction in equities this year weighed on long-term returns.
The benchmark index has declined more than 15% so far this year, entering a correction phase amid domestic and global pressures. These include an increase in the securities transaction tax in the Union Budget, tensions in the Middle East, and a weaker rupee. The decline has dragged long-term return metrics lower even as near-term volatility persists.
For March, both indices declined 11%, marking their worst March since the Covid period. For the financial year ended March 2026, the Nifty declined more than 5%, while the Sensex fell 7%.
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Outlook Signals
The recent decline may be nearing exhaustion, CLSA said, pointing to early signs of a possible rebound.
“While the blue-chip index has posted fresh price lows this week, the daily Relative Strength Index has failed to confirm these levels,” technical analyst Laurence Balanco said in a note. “This shows an early technical signal that downside momentum may be slowing.”
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He said the divergence in momentum, along with support in the 21,743–21,800 range, could set the stage for a rebound in the coming weeks. “Such divergences are often viewed by technical analysts as precursors to a trend stabilisation or short-term reversal,” Balanco said.
CLSA described the current setup as a “bottom-fishing” opportunity from a tactical perspective. The brokerage expects the index to remain within its broader 2024 trading band, with support at 21,743–21,800 and resistance in the 26,270–26,340 range.
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