The most common and most likely answer to this crossword clue is the 10 letter word KAFKAESQUE
I've seen this crossword clue in Financial Times
K
A
F
K
A
E
S
Q
U
E
More clues leading to the result KAFKAESQUE
Buddy explains!

The straight part
We know that "nightmarish" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case nightmarish = kafkaesque.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.