Market Insight: Will History Repeat Itself? Nifty Shows Potential for a 57% Rally!

Market Insight: The Nifty 50 index has surged nearly 17% from its April 2025 low of 21,744. However, if we look at data from the past 21 years, this may just be the beginning of a much bigger rally. Historically, major corrections in the market have been followed by strong rebounds. Experts are now pointing to a repeating trend being dubbed the “57% pattern.”

What Does History Indicate?

According to an analysis by Bajaj Broking, whenever Nifty has seen a correction of 10% or more that persisted across multiple quarters, the index on average rallied 32% in the next six months and 57% in the following 12 months. Even after excluding extreme years like the 2008 global financial crisis and the 2020 pandemic, the recovery numbers remain impressive — with average gains of 25% in six months and 38% in twelve months.

Snapshot of Past Market Performances:

2004: -36% drop, followed by a 45% gain in 6 months and 54% in 12 months.

2006: -31% drop, then a 45% and 61% rally.

2008: -65% crash, followed by a massive 54% and 115% recovery.

2011: -29% fall, then 13% and 31% recovery.

2015: -17% correction, almost no recovery — -1% in 6 months, 18% in 12 months.

2020: -40% drop, rebounded with 49% and 94% gains.

2022: -18% decline, followed by 20% and 24% rise.

2025 (So far): -17% decline followed by a 17% rally in 6 months.

What Makes This Rally Special?

Several global and domestic factors make the current rally unique. The most significant of these is the weakening U.S. Dollar Index (DXY), which currently stands at a three-year low of 96.86. According to Elara Securities, in years when the DXY drops by 5% or more, the Nifty has historically delivered average returns of 34%.

History suggests that DXY weakening cycles typically last 2–4 years. Given the current global scenario, further weakening is anticipated, which could benefit emerging markets — especially India.

Crude Oil & Dollar: A Double Advantage

Elara Securities notes that when both the DXY and Brent crude oil prices fall simultaneously, it creates a double benefit for the Indian market. Historical data shows that when DXY remains below 100, Indian equities have outperformed assets like Nasdaq and gold.

Technical Outlook

As per Bajaj Broking, technical indicators suggest there is more room for Nifty to rise. Experts believe the index could touch 26,000–26,200 in the coming months. While some profit-booking might occur at higher levels, the overall market direction remains positive.

The key support levels are expected between 24,800–25,000, aligning with the 20-day moving average and the recent breakout zone.

Earnings to Drive the Next Move

According to Neeraj Chaddhaur from Axis Securities, Q1 earnings will play a crucial role in determining the market’s next move. If companies offer positive guidance and global trade uncertainty eases, the markets could scale new heights.

What Should Investors Do?

Bajaj Broking suggests that minor dips should be seen as buying opportunities, especially in fundamentally strong sectors.

History has shown that major market corrections are often followed by powerful comebacks. If the historical 57% recovery pattern repeats, this rally may be just getting started. With a favorable global backdrop driven by a weaker dollar and falling oil prices, the Nifty’s uptrend could gain further momentum in the months ahead.

For investors, this is a time to remain cautious yet active — because opportunity is knocking at the door.