Indian investors have been relentless dip-buyers in recent years. Every bout of market weakness is seen as an opportunity to add equities, top up SIPs or deploy idle cash.
But an uncomfortable detail remains hidden in the data: In the current bull market, investors have largely been buying shallow dips, not deep wounds which is when investors get more bang for the buck.
Since the rally began on March 23, 2020, the Nifty 50 has delivered one of the strongest bull runs in Indian market history. It has also been unusually forgiving. Sharp declines have been less frequent, large drawdowns have been limited.
That is why the recent correction needs perspective. Seen in isolation, the market turmoil since the September 2024 peak may look unsettling.
There has been sharp stock-specific damage, global uncertainty and persistent nervousness around foreign flows. However, when benchmarked against earlier cycles, the takeaway is different: The current phase has seen fewer deep corrections, less frequent pullbacks, and more contained declines.
The popular “buy the dip” narrative may, therefore, be overstated.
To assess how severe the current correction really is, we studied each bull phase for the Nifty 50.
We counted how often the market fell more than 5 per cent and 10 per cent from recent highs, how frequently such declines occurred, and how deep the drawdowns were on average.
Fewer deep corrections
Despite running for more than 2,229 days, the ongoing bull market has seen only four drawdowns exceeding 10 per cent.
This is lower than the 2003-08 bull market, which saw six such instances, and comparable to the much shorter 2009-10 phase, despite the current cycle being significantly longer.
Based on Nifty 500 data, the trend is even stronger, with just three such instances.
This shows that investors are experiencing fewer large shocks over a much longer period in the current phase.
The average interval between corrections exceeding 5 per cent has increased consistently across bull cycles.
It stood at average of 80 days in the 1998-2000 rally, rose to 107 days in the 2003-08 phase, then to 121 days in the 2009-10 surge, and now stands at a remarkable 203 days in the current bull run.
While investors may perceive short-term volatility, the data clearly shows that meaningful corrections are happening far less often than before.
Further the average drawdown in the current bull market stands at about -4.6 per cent.
While this is slightly higher than the milder corrections seen during the 1998-2000 and 2009-10 bull phases, it is meaningfully lower than the -7 per cent average drawdown recorded during the 2003-08 rally.
High valuations absorbed
Average Nifty PE has climbed from 16x in 2003-08 and 19x in 2009-10 to about 24x in the current phase, with a peak of 31x.
Conventional wisdom suggests that higher valuations should lead to sharper and more frequent corrections. The data tells a different story.
Despite these premium multiples, the gap between corrections of more than 10 per cent has more than doubled, or is close to doubling, to about 557 days in the current phase.
In earlier bull markets, foreign institutional investors were the primary drivers of liquidity, often amplifying both rallies and corrections.
The present cycle marks a decisive shift.
Despite net outflows of about ₹47,878 crore from foreign investors, domestic institutional investors have infused over ₹20-lakh crore into equities.
This strong domestic participation has acted as a powerful stabilising force.
Takeaway
The data show a clear pattern in the current bull market.
Despite what sentiment may indicate with 339 stocks out of Nifty 500 currently trading more than 20 per cent below their lifetime highs, of which 74 stocks are down over 50 per cent from their peaks, at an index level corrections remain far less severe than in past cycles.
Reacting to every dip with aggressive buying may protect near-term returns, but in a market where deep corrections are scarce it could also impact long-term returns.
Published on May 2, 2026