Sensex Down Over 20% In Dollar Terms In 2026 As Rupee Weakness Adds To Losses

The Sensex has fallen more than 20% in dollar terms so far in 2026, putting Indian equities among the weakest performers in major global markets this year.

The Nifty has also declined 18.6% in dollar terms. Both indices have performed worse than most major markets, with only Indonesia recording a larger decline among the markets tracked.

The fall is less severe when measured in rupees. The Sensex is down 14.9% so far this year, while the Nifty has declined 13.1%.

For foreign investors, the difference matters because returns on Indian investments are ultimately converted into their home currency. A weaker rupee can therefore add to the loss even when the decline in the local stock market is smaller.

The rupee has fallen 6.4% against the dollar so far in 2026.

Indian Stocks Lose Ground To Overseas Markets

Indian equities have faced several pressures over the past year. Foreign investors have been pulling money out of Indian stocks since the end of September 2024 as earnings growth slowed and money moved towards markets such as South Korea and Taiwan, where technology and AI-related stocks have performed strongly.

US tariff concerns have added to the pressure. More recently, higher crude oil prices following the conflict in West Asia have created another problem for India, which imports most of its crude requirements.

The last time the Sensex and Nifty suffered a larger dollar-denominated decline was in 2011. Both indices had fallen by nearly 36% that year.

A fall of more than 20% from a peak is generally used as the threshold for describing a market as being in bear-market territory. On that measure, the Sensex has entered bear-market territory in dollar terms in 2026.

US And Asian Markets Outperform India

The gap with several overseas markets has widened this year. The S&P 500 has gained 12.2% in 2026, while the Nasdaq Composite and Dow Jones Industrial Average are up 15% and 7%, respectively.

European markets have been mixed. The FTSE 100 has risen 6%, while the CAC 40 is down 4%. Germany's DAX has gained 0.8%.

Asian markets have also delivered stronger returns in several cases. Japan's Nikkei has risen 30%, while Hong Kong's Hang Seng has fallen 6%. China's Shenzhen index is up 0.8%.

Taiwan and South Korea have been among the stronger performers, with their benchmark indices gaining 61% and 72%, respectively. Indonesia's Jakarta Composite has fallen 34%, while the Philippines index is down 11%.

Domestic Investors Cushion FPI Selling

Heavy foreign selling has not translated into an equally large fall in Indian equities in rupee terms because domestic investors have continued to put money into the market.

Foreign portfolio investors have pulled out more than ₹2.17 lakh crore over the past year. Domestic mutual funds, however, have brought in around ₹4.98 lakh crore during the same period.

These domestic flows have provided support as overseas investors reduced their exposure to Indian equities. Even so, the Sensex's dollar-denominated market capitalisation has fallen by more than $372 billion so far in 2026.

Reliance, HDFC Bank And TCS Lead Market-Cap Loss

A large part of the decline in market value has been concentrated in a handful of major companies.

Reliance Industries has seen the biggest erosion, with its market capitalisation falling by nearly $70 billion in dollar terms. HDFC Bank follows with a decline of around $54 billion, while TCS has lost roughly $52 billion. Infosys has seen its market value fall by around $32 billion and ITC by about $22 billion.

Maruti Suzuki India and Bharti Airtel have each lost around $19 billion in market capitalisation. Hindustan Unilever and Mahindra & Mahindra have seen declines of approximately $15 billion each.

Together, these 10 companies account for around 80% of the more than $372-billion fall in the Sensex's dollar-denominated market capitalisation.

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