Indian markets love FIFA World Cup, shows data. Will 2026 be different?

Indian stock markets, as represented by the BSE Sensex, have given a positive return every calendar year (CY) since 1990 when the FIFA World Cup has been held, shows data.

 

The calendar year gains for the BSE Sensex in FIFA world cup years have ranged between 3.5 per cent when the tournament was held jointly in Japan and Korea in 2002, to 46.7 per cent when Germany played hosts in 2006, data shows.

 

The only exception has been 1998 (CY98) when the BSE Sensex slipped 16.5 per cent as market sentiment was dented due to Pokhran nuclear tests in May and the ensuing economic and trade sanctions by the US, Japan and other major countries, which were subsequently lifted.  

 

 

The year also marked a change in the central establishment back home with Atal Bihari-led Bharatiya Janata Party (BJP) winning most seats in the general elections and forming a coalition government.

 

Will 2026 go the 1998 way?

 

The Sensex in CY26 thus far gone the 1998 way with index slipping nearly 13 per cent to around 73,900 levels. The fall has been triggered by the West Asia war that has sent crude oil prices soaring, rupee depreciating and foreign investors cashing in. 

 

Uncertainty around the India – US trade deal and the narrative around artificial intelligence (and India’s lack of AI plays) has also dampened sentiment thus far in CY26, analysts believe.

 

"Geopolitical tensions have created a new challenge. The key risks to India are mostly external, including geopolitical tensions and slowing global growth. Back home, we worry about the low productivity in farming and embodied AI hitting the labour markets," said Ridham Desai, managing director and chief India equity strategist, Morgan Stanley, in a coauthored report with Nayant Parekh. 

 

 

The lack of a direct AI plays, Morgan Stanley said, seems to be the most persistent challenge to the equity market with potential AI disruption for Indian services exports aggravating matters. 

  Their June 2027 base-case target for the BSE Sensex is 89,000 that assumes continuation in India's gains in macro stability, increased private investment, and a positive gap between real growth and real rates.  

U R Bhat, co-founder & director, Alphaniti Fintech, however, cautions that the markets may remain range-bound in the next 6 months with the Nifty moving between 22,800 and 23,400 levels in case there is no resolution the West Asia conflict soon. 

 

“There are too many moving parts as things stand, which will determine how the markets play out from here. The next six months will be marked with volatility. In my base case I expect them to be around the current levels by 2026-end. However, if the war ends in the next couple of months and crude oil prices fall, Indian markets can hit historic highs,” Bhat said.

 

Bernstein’s year-end target for the Nifty stands at 26,000 – up around 12 per cent from the current levels, but ending 2026 with a negligible -0.5 per cent return. 

 

"While a de-escalation in MENA could trigger a relief rally, we expect it to be short-lived given weak macro underpinnings and a likely revival in equity issuance. We maintain our Nifty year-end target of 26,000 and retain a Neutral stance," said Bernstein’s managing director, Venugopal Garre.

 

Economic stress

 

Hosting the FIFA World Cup, or even naming the host country, has often coincided with major economic events, a BofA Securities note said. Mexico's 1986 World Cup overlapped with the Latin American debt crisis (1982 – 1989). 

 

The announcement for Japan to host the tournament in 2002 was made in May 1996, which was followed by the Asian financial crisis between 1997 and 1998.

 

Likewise, the 2026 FIFA World Cup in the US, Mexico and Canada comes amid the US-Iran conflict, which has triggered a global stock market selloff. Oil prices have surged from around $65 to over $125 a barrel, while gold and silver prices have declined.