Investors are rattled by geopolitical tensions. But before you make any decisions, let the data speak. The history of Indian equity markets through crises is more reassuring than most people realise.
The recent US–Iran war has led to a major bloodbath in Indian bourses. As of 23rd March 2026, Nifty 50 has fallen by 13.9% YTD.
When geopolitical tensions dominate every news cycle and market indices bleed red, the impulse to protect what you've built is natural — even rational-feeling. But before making any portfolio decision in the heat of the moment, every investor owes it to themselves to look at the historical data dispassionately.
At Aureva Capital, our research team analysed 26 full calendar years of Nifty 50 data — from January 2000 to December 2025. What we found was both sobering and, ultimately, deeply reassuring.
The short answer? You are almost certainly overestimating the severity of the current fall — and underestimating the resilience of Indian equity markets.
"Volatility isn't the exception in equity markets. It is the price of admission."
— Aureva Capital ResearchThe Data: 26 Years of Market Drawdowns
A "drawdown" refers to the maximum fall the Nifty 50 experienced from its peak to its trough within any given calendar year. It is the single most honest measure of the short-term pain an equity investor must endure — and it tells a very different story from the one that dominates the news.
Let those numbers sink in. Even in a completely normal year — no pandemic, no war, no financial crisis — the Nifty 50 falls nearly 20% from its peak at some point. This is not a warning sign. It is simply how equity markets work.
In 22 out of 26 years analysed — that is 85% of the time — the Nifty 50 experienced a drawdown of at least 10% at some point during the year. Only four years in over two and a half decades saw falls of less than 10%.
Think of a 10% fall not as a crisis, but as the entry ticket to the equity game. It is the minimum price you pay for the potential of long-term compounding. An investor who panics and exits every time the market falls 10% is, statistically speaking, exiting almost every single year.
The "moderate" drawdown band — defined as a fall between 10% and 20% — is by far the most common historical experience. It accounts for 14 out of 26 years, or 54% of all years in our dataset.
As of March 2026, the Nifty 50 is at approximately −13.9% from its recent peak. By the standards of the last 26 years, this is an entirely unremarkable, moderate drawdown. It is not a crash. It is not even close to the historical average annual drawdown of −19.3%.
Investors experiencing anxiety about the current fall are, with respect, experiencing a very normal year in Indian equity markets.
Only four years in 26 crossed the 30% drawdown threshold: 2000 (the dot-com bust), 2001 (the aftermath of the 9/11 attacks), 2008 (the Global Financial Crisis), and 2020 (the COVID-19 pandemic selloff).
These are genuine tail risks, and every investor should be mentally and financially prepared for them. But the crucial point is this: all four were fully recovered from. Every single one.
The question is never whether the market will recover. Based on 26 years of Indian equity history, the answer to that is unambiguous. The question is whether you will still be invested when it does.
Perhaps the most important number for any long-term investor to internalise is this: on average, the Nifty 50 falls 19.3% from its peak to its trough every single year.
Volatility is not the exception in equity markets. It is not a sign that something has gone wrong. It is the structural feature of the asset class — and it is precisely this volatility that creates the return premium that equity investors enjoy over safer assets.
A Look at the Historical Record
The table below summarises the annual drawdown data across all 26 years. Study it not as a list of crises, but as a reminder of how routine market volatility truly is.
| Year | Drawdown | Severity | Context |
|---|---|---|---|
| 2000 | −35.3% | Severe | Dot-com bust |
| 2001 | −39.7% | Severe | 9/11 aftermath |
| 2002 | −22.7% | Elevated | Global slowdown |
| 2003 | −16.0% | Moderate | Recovery year |
| 2004 | −29.9% | Elevated | Election volatility |
| 2005 | −13.0% | Moderate | Bull market |
| 2006 | −29.9% | Elevated | Global selloff |
| 2007 | −15.3% | Moderate | Pre-GFC highs |
| 2008 | −59.9% | Catastrophic | Global Financial Crisis |
| 2009 | −17.6% | Moderate | GFC recovery |
| 2010 | −10.7% | Moderate | Stable growth |
| 2011 | −26.2% | Elevated | Euro debt crisis |
| 2012 | −13.8% | Moderate | Policy uncertainty |
| 2013 | −14.6% | Moderate | Taper tantrum |
| 2014 | −6.5% | Mild | Election rally |
| 2015 | −16.0% | Moderate | China slowdown fears |
| 2016 | −12.5% | Moderate | Demonetisation |
| 2017 | −4.1% | Mild | Calmest year on record |
| 2018 | −14.6% | Moderate | IL&FS, NBFC stress |
| 2019 | −11.4% | Moderate | Slowdown concerns |
| 2020 | −38.4% | Severe | COVID-19 pandemic |
| 2021 | −10.1% | Moderate | Vaccine rally |
| 2022 | −16.5% | Moderate | Rate hike cycle |
| 2023 | −7.1% | Mild | Resilient economy |
| 2024 | −10.9% | Moderate | Election year |
| 2025 | −8.7% | Mild | Steady growth |
The Case for Long-Term and SIP Investors
If the data above makes one thing clear, it is this: paper losses are not real losses until you sell. Every drawdown in the table above was temporary. The Nifty always recovered, always made new highs, and always rewarded patient investors.
For SIP investors, the logic is even stronger. A market drawdown is not something to fear — it is something to welcome. Every monthly SIP instalment invested during a drawdown buys more units at a lower price, lowering the average cost basis and amplifying future returns when the inevitable recovery comes.
The investor who stopped their SIP in March 2020 did not protect themselves. They denied themselves the cheapest entry point in years.
The Nifty 50 rose from 1,592 in January 2000 to 26,129 in December 2025 — through two severe bear markets, a global financial crisis, a pandemic, multiple geopolitical crises, demonetisation, and the Euro debt crisis.
Every single one of those events felt, at the time, like it might be "different." None of them permanently derailed Indian equity markets.
So, Should You Exit?
"The investors who got rewarded were not the ones who timed it perfectly. They were the ones who simply stayed."
Let's return to the original question. The honest, data-backed answer is: almost certainly not.
The current drawdown of approximately −13.9% is below the 26-year average annual drawdown. It falls squarely within the "perfectly normal" moderate band that has characterised 54% of all years in our dataset. There is no historical precedent to suggest that a drawdown of this magnitude — absent a major systemic shock — becomes a permanent impairment of capital.
Timing the market — exiting to "wait for the situation to settle" and re-entering when things look calm — is one of the most reliably wealth-destructive strategies in investing. The calm moments that feel "safe" to re-enter typically arrive after the sharpest part of the recovery is already over.
Forget the noise. Stay invested.
The market rewards the patient.
Disclaimer: This article is intended for informational and educational purposes only and does not constitute personalised investment advice. Past performance of the Nifty 50 index is not indicative of future results. All investments in equity markets are subject to market risk. Readers are advised to consult a SEBI-registered investment advisor before making any investment decisions. Aureva Capital Private Limited is not liable for any investment decisions made based on the information contained in this article.
