Nifty 50 outlook: Amid soaring crude oil prices, rising US Treasury yields, and escalating tensions in the US-Iran war, which are weighing on global markets, including the Indian stock market, the Nifty 50 index has shed around 10.50% YTD. Among other key benchmark indices, the BSE Sensex has shed over 12%, whereas the Bank Nifty index has corrected around 5.20% in 2026.
This has cast doubt among Dalal Street observers on whether the Nifty 50 index will recover over the next three and a half months or remain in the negative zone. If the 50 stock index finished in the red zone, it would be the first time in a decade. The last time the Nifty 50 index finished in the red was in 2015, when the key index posted a 3% loss. Before 2015, the 50-stock index delivered a negative return in 2011, correcting by around 23.80%. In 2008, the Nifty 50 index crashed by over 51% as the global economy faced the subprime-loan crisis.
According to stock market experts, the key benchmark indices are in negative territory due to sharp selling in Reliance and HDFC Bank shares. They said that these two index heavyweights have corrected 20% and 30% respectively, which is one of the major reasons for the big correction visible in the Nifty 50 and the BSE Sensex. They believe the Jio Platforms IPO is expected to hit the Indian primary market around Dussehra, which may fuel buying in Reliance shares. Similarly, HDFC Bank is facing a corporate governance issue after the exit of its CEO. The new CEO is expected to be appointed by the end of September, which is also good news for a banking major hit by the bear market. However, experts believe that global factors such as geopolitical tensions, the US Fed rate, US Treasury yields, and crude oil prices are expected to continue to dictate Dalal Street’s movements.
Why is the Nifty 50 in red territory?
On reasons that are weighing on the Nifty 50 index, Ajit Mishra, SVP — Research at Religare Broking, said, “Geopolitical tensions and elevated crude oil prices remained the dominant drivers of market sentiment. Escalating US-Iran tensions raised concerns over disruptions to global energy supplies, while Brent crude retesting the $110-per-barrel mark intensified worries over imported inflation, the current account, corporate margins and the rupee.”
The Religare Broking expert said that rising US bond yields and expectations of a US Fed rate hike at this week’s meeting further pressured emerging-market equities. Investors remained cautious ahead of the US Fed meeting, particularly after the July meeting minutes highlighted ongoing concerns about persistent inflation and the possibility of further rate increases if price pressures remain elevated.
Jio Platforms IPO, HDFC Bank CEO appointment in focus
Pointing to the performance of Nifty 50 and Sensex heavyweights, Seema Srivastava, Senior Research Analyst at SMC Global Securities, said the 50-stock index is in the red zone due to a sharp sell-off in the index heavyweights HDFC Bank and Reliance Industries. She said that HDFC Bank’s share price has nosedived by nearly 30% YTD, while Reliance’s has crashed by around 20% in 2026. As index heavyweights, these two stocks’ declines are among the major reasons for the big correction in the Nifty 50 and the BSE Sensex in YTD.
“Reliance Industries is expected to go for the value unlock by launching its Jio Platforms IPO around Dussehra. This is expected to fuel Reliance shares, and a 12% to 15% upside in Reliance shares can’t be a surprise to Dalal Street observers. Likewise, HDFC Bank is facing a corporate issue due to the exit of its CEO. However, a new CEO is expected to be appointed by the end of September 2026, which is also a positive sign for the banking major. I am expecting at least 15 to 20% upside in the near-term after the appointment of a new CEO at HDFC Bank,” said Seema Srivastava.
The SMC Global Securities expert, a certified Chartered Accountant, also said that if these two stocks rally as expected, the Nifty 50 index could approach the 24,500-24,600 levels.
FCNR bond holds key
How the Nifty 50 index would pare the rest of its losses accrued in 2026, because the 50-stock index had begun its journey at around 26,140 in 2026, Sandeep Pandey, Co-founder of Basav Capital, said, “The rest of the Nifty 50 losses would be covered when there is US dollar inflow, which comes through the FPI and FII. As crude oil prices are at a higher level, the Indian government introduced FCNR bonds. This caused the inflow of US dollars into India to pause the fall of the Indian National Rupee (INR).”
However, the Basav Capital Co-founder maintained that FCNR bonds are fetching US dollars at higher rates, and it would provide relief for the short-term. For a permanent solution, the GoI is trying to leverage the Strait of Hormuz crisis through the Russian oil imports, but higher US tariffs are doing the damage there. Any breakthrough in the US-Iran talks ahead of the midterm polls in the US would also be a trigger that may help the Nifty 50 index to pare YTD losses.
However, experts nodded in unison that the Nifty 50 index would either end in the red zone or finish flat at the end of CY2026.
Disclaimer: This story is for educational and informational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified financial experts before making any investment decisions.
About The Author
