Nifty Index fell 8.1% over the last eight weeks, the longest uninterrupted decline since 1990, and has been below its 200‑day moving‑average for 145 consecutive trading days—an eighth‑longest streak in the index’s history. —The index has avoided a 20% plunge from the September 2024 peak, a cushion that has kept panic‑driven crashes at bay.
Four consecutive negative monthly closes ended March 2026, the seventh such episode since 1990, and the last eight‑week losing streak was only an 8.1% drawdown—contrasting sharply with the 16%‑19% early‑period losses seen in previous eight‑week cycles.
Valuation data from the DSP Mutual Fund report shows large‑caps trading at 19× last‑12‑month earnings and 2.75× book value, 10th percentile on a 5‑year CAGR basis—well below the historical median of 3.5×, making them relatively cheaper. Small‑ and mid‑caps sit 72% and 56% above their historical medians, respectively, and hover roughly three standard deviations above long‑term means.
Global flows paint a bleak picture: rolling 24‑month FII outflows hit $56.2 billion, the worst since 2012, while the MSCI EM index surged 39.3% in dollar terms from July 2025 to September 2026, versus a 14.6% decline in the Nifty—creating a 53.9‑percentage‑point divergence unprecedented in a rising EM environment.
Forward outlook: large‑caps, having absorbed valuation compression while maintaining solid ROEs, offer the safest margin of safety. Mean reversion is more likely to play out through normalization of sectoral and global gaps than via a destructive crash. Investors should monitor the next quarterly results for signs of earnings catch‑up and valuation realignment.