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A market can spend several years going sideways even when individual years within that period look very different.
A two-year period of poor or negative returns can feel unusually long in a market such as India, where investors have become accustomed to strong equity returns over the past decade.
The Indian stock market has been going through a phase that can feel frustrating for investors. The Nifty has spent roughly two years without delivering a positive price return, and after the recent sell-off, the benchmark is actually well below its September 2024 levels.
The Nifty closed at 22,620.35 on September 30, 2026, after falling 6.1% in September alone. Compared with levels around 25,800 in late September 2024, the index is down roughly 12% over the two-year period.
So, how long can a stock market go without making money? The answer from global market history is: much longer than most investors expect.
Two years of stagnation is not unprecedented
A two-year period of poor or negative returns can feel unusually long in a market such as India, where investors have seen strong equity returns over the past decade. But, markets do not move in a straight line. There have been several instances when major global indices spent many years recovering from an earlier boom, valuation excess or economic shock.
The S&P 500, for instance, went through a prolonged period of weak performance after the dot-com bubble burst. The index also experienced a long period of stagnation during the inflationary and stagflationary environment of the 1970s.
| Index | Sideways Period | Duration | Primary Catalyst |
|---|---|---|---|
| S&P 500 (US) | 2000 – 2013 | 13 Years | Dot-com bubble burst followed by the 2008 Global Financial Crisis |
| S&P 500 (US) | 1966 – 1982 | 16 Years | High inflation, stagflation, and rapidly rising interest rates |
| Nikkei 225 (Japan) | 1989 – 2024 | 35 Years | Collapse of extreme Japanese real estate and asset valuations |
| Sensex (India) | 1992 – 2003 | 11 Years | Post-1992 valuation normalisation and the Asian Financial Crisis |
| Nifty 50 (India) | 2008 – 2014 | 6 Years | 2008 crash aftermath, high domestic inflation, and policy stagnation |
Japan provides an even more dramatic example. The Nikkei 225 took more than three decades to reclaim its December 1989 peak. It finally surpassed that level in February 2024, ending a roughly 34-year wait.
That does not mean the Nifty is headed for a similar three-decade period. It simply demonstrates that there is no fixed maximum period for which an equity market can remain below a previous high.
The Nifty itself has seen long periods of weak returns
India has also experienced prolonged periods when the benchmark struggled to make meaningful progress. The Nifty’s annual data shows how sharply returns can vary across market cycles. After falling 51.8% in 2008, the index rebounded 75.8% in 2009 and gained another 18% in 2010. It then fell 24.6% in 2011 before recovering in subsequent years.
A market can spend several years going sideways even when individual years within that period look very different. A prolonged sideways market does not necessarily mean that prices remain unchanged every year. Instead, sharp rallies and corrections can cancel each other out over a longer period.
Why can markets remain stuck for years?
1. Valuations need time to catch up with earnings
One of the most common reasons for a long period of subdued index returns is an expensive starting valuation. If investors pay a very high price for a company’s earnings, future returns can suffer even when the company continues to grow.
This happens because the market’s valuation multiple can fall while corporate earnings rise. For example, suppose earnings increase 10% a year but the price-to-earnings multiple falls substantially. The index may deliver little or no return despite healthy earnings growth.
This is effectively a valuation reset. Recent analysis cited by The Economic Times noted that Nifty’s forward P/E had fallen from around 21.5 times in 2024 to about 17.4 times in 2026, reflecting a significant valuation reset.
2. Corporate earnings may not grow fast enough
Ultimately, an index represents the profits and valuations of its constituent companies. If earnings growth slows, investors may be unwilling to pay the same valuation multiples they were willing to pay during a stronger growth cycle. That can result in a market that moves sideways even without a major economic recession.
3. Inflation and interest rates can change the equation
Higher inflation and interest rates can be particularly uncomfortable for equity markets. Higher bond yields provide investors with an alternative to equities while also increasing the discount rate applied to future corporate earnings. The US market experienced prolonged periods of weak real returns during earlier inflationary episodes, illustrating how macroeconomic conditions can extend market cycles.
4. Global shocks can prolong a correction
Markets rarely operate in isolation. Oil prices, geopolitical tensions, US interest rates, bond yields, currency movements and foreign portfolio flows can all affect Indian equities. That is particularly relevant for the current market. In September 2026, the Nifty fell 6.1%, while foreign investors pulled about $2.7 billion from Indian equities. Higher US rates, geopolitical tensions and elevated oil prices were among the factors weighing on sentiment.
Reuters also reported that foreign investors’ selling and rising global bond yields remained significant concerns as the market entered October.
Quick Answers
Ask News18The Nifty benchmark has spent roughly two years without delivering a positive price return, closing at 22,620.35 on September 30, 2026, after falling 6.1% in September alone.
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Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalis…Read More
October 02, 2026, 1:48 PM IST
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