The Nifty 50 has dropped 10.3% amid widespread pressures, with losses extending across major names like HDFC Bank and Tata Motors as foreign investors pruned holdings across at least 53 large firms. Largecap equities experienced a disproportionate downturn relative to mid and smallcaps, leaving valuations nearly a fifth below their historical averages. However, with Motilal Oswal projecting corporate earnings to expand at a 15% compound annual rate through FY28, analysts expect largecaps to lead any liquidity-driven market rebound.
Key points
Heavy selling by foreign institutional investors has concentrated market losses within to…: Heavy selling by foreign institutional investors has concentrated market losses within top-tier bluechip equities.
Largecap valuations have dropped to 16.4 times one-year forward earnings, sitting roughly…: Largecap valuations have dropped to 16.4 times one-year forward earnings, sitting roughly 18% under historical norms.
Expected corporate earnings growth of 15% through FY28 positions largecaps favorably for…: Expected corporate earnings growth of 15% through FY28 positions largecaps favorably for when foreign inflows eventually return.
Sources checked by our analysis pipeline: 1
Escalating geopolitical tensions, elevated crude oil prices, rising global bond yields, a stronger US dollar and sustained foreign institutional investor (FII) outflows weighed on market sentiment. Consequently, the Nifty 50 fell 10.3% in the year to October 23, 2026. The weakness was not limited to frontline stocks. The Nifty 500 slipped 7.8%, while the Nifty Midcap 100 and Nifty Smallcap 250 declined 4.5% and 3.7%, respectively.
The damage at the individual-stock level was particularly pronounced. Since last Diwali, 83 largecap stocks have declined, with losses of up to nearly 60%. The list includes Swiggy, Tata Motors, HDFC Bank, Infosys, ITC, Vedanta, Tata Consumer Products and Jio Financial Services, among others.
The winners, meanwhile, have been considerably fewer. Just 43 largecap stocks managed to post gains, with BHEL, Hitachi Energy, SAMIL, Titan, Shriram Finance, Hindalco and Adani Power among the top performers. Their gains extended to as much as 70%.
Against this backdrop, the key question for investors is whether largecaps can regain their footing after a bruising year.
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