On September 25, 2026, the Sensex ended the day at 73,895.74, 13.91% lower than the September 26, 2024 high of 85,836.12. The dip followed a 1‑year cumulative decline of nearly 14%, matching the steep slide seen during the 2008 crisis.
The index’s price‑earnings multiple collapsed to 19.8x from a pre‑pandemic average of 26x, signalling a pullback in valuations that aligns with the 24% CAGR slowdown seen between FY21 and FY24. Analysts at Motilal Oswal note the move as a correction through time rather than a sharp price drop.
Foreign institutional investors have walked away, racking up Rs 3.70 lakh crore in net selling this calendar year, and Rs 6.00 lakh crore over 2024–25. The exodus has tightened the market, making stock selection crucial as domestic inflows now drive the remaining 50% of position.
Sector‑specific pressure is evident: BFSI and IT – the top two weightages in the Sensex – recorded EPS growth of 1.3% in FY25 and only 5% in FY26, below the 7% sector benchmark. HDFC Bank’s margin compression post‑merger and AI‑driven cost pressure on IT firms have pushed the two sectors below the market average.
Looking ahead, the next quarterly earnings cycle will test whether valuations can rebound. Expected releases from banks such as ICICI and SBI, and the RBI’s upcoming policy meeting, could provide a catalyst if credit growth steadies and the rupee stabilises. Investors will monitor whether the P/E can climb back above 20x before a sustained rally can be considered viable.