Nifty 50 down 13.5% in 2026, set for worst year in 15 years: Key factors weighing on market sentiment

The Nifty 50 is down 13.5% in 2026, on track for its worst annual decline in 15 years since the 24.62% plunge in 2011. Key headwinds include the US-Iran conflict that erupted in February, Brent crude holding above $100 per barrel, global rate hikes by the US Fed, Bank of Japan, and European Central Bank, and sustained selling by overseas investors. Domestic factors such as a falling rupee, limited AI exposure, and rural stress from El Nino-linked weaker rainfall have added to the pressure, while domestic mutual funds backed by retail flows have cushioned the fall.