In this PERSPECTIVES Viewpoint Equity: India’s equity market – Ready to rebound?, we examine whether India’s recent equity market underperformance signals a prolonged trend or sets the stage for a catch-up, as domestic resilience and global dynamics shape the outlook for the year ahead.

 

Key takeaways:

  • India’s equity market is losing steam after being a post-pandemic outperformer as domestic sluggishness is compounded by global pressures from trade deal delays and foreign outflows.
  • Foreign investors are selling Indian equities due to valuations concerns and trade deal delays, but domestic investors remain confident. While foreign investor outflows significantly impact short-term performance, their long-term effect should be limited – Prolonged trade uncertainty might however weigh on near-term sentiment.
  • With domestic demand set to pick up, double-digit earnings growth is expected in 2026, and the market’s mid-range valuation present a compelling opportunity for medium to long term investors.

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