TRENDS IN STOCK MARKET INDICES OVER THE PAST DECADE IN INDIA: AN EMPIRICAL ANALYSIS OF SENSEX AND NIFTY 50 FROM 2016-2025
Mithuna R A. Rahamath Nisha
Abstract
Purpose. This study scrutinizes the trends, growth trajectory, and volatility patterns exhibited by India’s two principal benchmark equity indices, the BSE Sensex and the NSE Nifty 50 over the past decade (2016–2025). It seeks to identify the macroeconomic and structural drivers underlying index growth, to describe the major episodes of volatility that punctuated this growth, and to assess the implications of India’s expanding retail investor base for market depth and stability. Design The study adopts a descriptive-analytical research design based on secondary time-series data. Decade-long data on Sensex and Nifty 50 closing levels, calendar-year returns, rolling compound annual growth rate (CAGR), market capitalization, and demat account growth were compiled from NSE Indices, BSE, SEBI and other published secondary sources. Trend analysis, CAGR computation, and comparative benchmarking against major global indices were employed to describe the decade’s performance and to relate index-level movements to identifiable macroeconomic and policy events. Findings Both indices recorded sustained long-term growth despite pronounced short-term volatility. The Sensex advanced from around 26,600 at end-2016 to approximately 84,647 by end-2025, closing higher for ten consecutive calendar years, while the Nifty 50 brought an annualized return of roughly 12.6 per cent over the decade, outperforming most global peers other than the Nasdaq. The period was punctuated by the March 2020 COVID-19 crash, the sharpest single-month decline of the decade, followed by a rapid recovery, and by episodic corrections linked to global monetary shrinking in 2022.Structural drivers of the decade’s growth include tax and GST reform, sustained government capital expenditure, resilient corporate earnings, and a near four-fold rise in demat accounts, reflecting the rapid validation of retail participation through digital broking platforms. Practical Implications The findings offer guidance to retail and institutional investors on the value of long-horizon, systematic investment strategies that ride through short-term volatility, and to policymakers and regulators on sustaining reform momentum while consolidation safeguards against retail-driven volatility amplification. Originality/Value The study contributes a decade-long, integrated synthesis of index-level performance trends with market microstructure developments particularly the retail participation rushes an intersection that is less commonly addressed jointly in the extant, largely volatility-focused, literature on Indian equity markets.