💥 Why Is Nifty50 Underperforming? — Understand the Market Psychology💥
Today, The proposed IRDAI changes related to insurance commissions also triggered sharp selling in major stocks such as PB Fintech, Max Financial, HDFC Life and Bajaj Finance. FII selling in large-cap stocks put pressure on the Nifty50, which came very close to the 23,000 psychological level.
Whenever Nifty50 approaches an important psychological level, retail investors often become panic thinking the market could fall further, triggering panic selling. I explained this retail-investor psychology in detail in my YouTube video.
We saw a similar situation when Nifty50 was trying to break below 24,000 in last 3 months. More recently, on 15 September 2026, when Nifty50 came close to the 23,000 level, we witnessed strong panic selling from retail investors, and our portfolio was also deeply in the red that day.
In my view, the current Nifty50 weakness is primarily linked to FII selling in large-cap stocks.
When Nifty50 breaks important levels, the initial weakness in large caps creates fear among retail investors, which can then lead to panic selling in small- and mid-cap stocks as well.
We have seen this cycle repeatedly over the past several months:
But as soon as Nifty50 starts recovering, buying interest can quickly return to small- and mid-cap stocks.
⚠️ Don't Blame Everything on Crude Oil or Bond Yields
I don't believe Nifty50's underperformance can simply be explained by crude oil prices or bond yields.The bigger issue, in my view, is the lack of strong earnings growth from several major companies.
When FIIs compare the growth opportunities offered by leading AI-related companies in the US with many of India's large-cap companies, there is currently a significant gap in earnings-growth expectations.
Remember, in June 2026, crude oil prices had fallen to around $70, yet Nifty50 still did not significantly outperform. Therefore, we should not link every phase of Nifty50 weakness to crude oil prices.
📊 This Is a Stock Picker's Market
In this market, traders are totally frustrated because they are struggling to make profits due to the high volatility and unpredictable price movements.
However, our strategy of investing in high-growth companies from emerging sectors is continuing to deliver good results even in such an underperforming market. Our portfolio gains are increasing consistently, despite the broader market remaining volatile.
This is clearly a stock picker's market.
To counter this kind of volatile and challenging market, you need a different strategy and a different approach.
Simply trading the index or following short-term market movements can be extremely difficult in such conditions.
Trading is becoming very difficult in this type of market.
The key is to identify the right emerging sectors, the right companies and the right growth stories .