Indian Stock Market Falls 12 to 13 Percent in 2026 as Axis Direct Outlines Eight Key Market Triggers

Benchmark indices Sensex and Nifty 50 have dropped around 12 to 13 percent so far in 2026, staying under constant pressure due to domestic and global problems. Axis Direct notes that the Nifty trades at 16.4 times on a one-year forward basis, sitting below its long-term average valuation multiple of 18.4 times.

Eight Triggers

Brokerage firm Axis Securities outlined eight factors that could reverse the market drop in its report titled "Axis Diwali Mahurat Picks: SAMVAT 2083; Axis Securities". Brent crude touched US$114 per barrel on October 23 amid rising West Asia tensions, and a drop to US$85 to US$90 per barrel would help lower costs and support the rupee. The Reserve Bank of India kept monetary easing limited due to climbing inflation, while the US Federal Reserve held a policy meeting on October 27 and 28. Foreign portfolio investors stayed net sellers with total outflows reaching ₹52,353 crore up to October 22. A durable recovery also needs corporate earnings to improve across the second and third quarters. India and US trade talks are nearing final conclusion, while the Union Budget in early 2027 remains a key domestic milestone. Domestic retail support stayed strong with monthly systematic investment plan contributions hitting a record ₹32,490 crore in September 2026. Finally, Consumer Price Index inflation reached 5.54 percent in September, while the Reserve Bank of India projected inflation at 5.2 percent for the 2027 financial year.

Context

Stock market corrections happen when share prices drop after a period of gains, often triggered by external shocks or rising costs. Brokerage reports like those from Axis Direct help investors plan their buying strategies by studying valuation multiples and upcoming economic events.