Navratri Slump: A New Normal for Indian Markets?
Navratri, a period often considered auspicious for investors, has turned out to be a season of gloom for Indian equity markets for the fourth consecutive year. Since 2022, both the Sensex and Nifty have consistently ended the festival week in the red, reversing the trend of strong festive cheer that markets enjoyed until 2021.
Performance of Sensex and Nifty During Navratri
In 2025, the Sensex slipped 1.99% and the Nifty lost 1.94% over the eight trading sessions of Navratri. This weakness extended a pattern of declines seen in 2024, with the Sensex falling 3.42% and the Nifty losing 3.23%. In 2023, the Nifty and Sensex fell 2.48% and 2.38%, respectively, while in 2022, the Nifty was down 0.06% and the Sensex fell 0.31%.
The last time the festival period brought cheer was in 2021, when both benchmarks delivered returns of over 3.5%. This significant shift in market sentiment during Navratri raises questions about the underlying factors driving this trend and its implications for Indian investors.
Factors Contributing to the Slump
The slump during Navratri can be attributed to multiple factors, including weak investor sentiment due to concerns over higher US tariffs, expensive stock valuations, and slower-than-expected earnings growth. The drag was compounded by heavy foreign outflows, with overseas investors pulling a net Rs 17,000 crore from Indian equities in the first six trading days of Navratri 2025, according to NSDL data.
Adding to the pressure, benchmark indices fell for seven straight sessions during the period, before staging a mild rebound on Oct. 1. The recovery came after the Reserve Bank of India kept interest rates unchanged and signaled that easing may be on the horizon to support growth. The central bank also raised its fiscal 2026 growth forecast to 6.8% and lowered its inflation estimate to 2.6% on expectations of stable food prices.
Impact on Mid- and Small-Cap Indices
Mid- and small-cap indices fared worse this year, with the Nifty MidCap 100 shedding 3.49% and the Nifty SmallCap 100 plunging 4.05%, compared with the Nifty’s 1.94% fall. Historically, mid- and small-caps have seen sharper swings around Navratri, and 2025 was no exception.
Sector-wise, the damage was widespread. Only Nifty PSU Bank, which rose 1.37%, and Nifty Metal, which was up 1.03%, ended in the green, while all other sectoral indices fell. Nifty IT bore the heaviest blow, plunging 7.31%, hit by fresh headwinds from the US. The H-1B visa fee increase — with a steep $100,000 charge on new petitions — is set to impact Indian IT companies, particularly TCS, which ranks among the largest visa recipients.
Navigating the Challenging Market Environment
For Indian investors, navigating this challenging market environment requires a deep understanding of the factors driving the slump and a well-informed investment strategy. As the market mood remains fragile, investors may need to temper their expectations for seasonal market rallies unless earnings momentum improves and global headwinds ease.
Staying updated with the latest market news and trends is crucial for making informed investment decisions. Visit our website for more information on Nifty today, Sensex news, and Indian stock market updates.
Conclusion
The Navratri slump in the Indian stock market highlights the importance of understanding the underlying factors driving market trends and making informed investment decisions. As the market continues to evolve, staying ahead of the curve with the latest news, trends, and analysis is key to navigating the challenges and opportunities in the Indian stock market.
