India’s nearly US$5 trillion equity market has come under pressure due to foreign outflows sparked by fears over falling consumption. — Reuters
NEW DELHI: Investors are expecting Indian stocks to post another quarter of losses as a slowdown in economic growth and sticky inflation hurt corporate earnings and foreign flows.
The benchmark NSE Nifty 50 Index will likely drop at least 5% in the three months through March, according to a majority of 22 strategists and fund managers in an informal survey conducted by Bloomberg early this month.
Concerns over geopolitical tensions during Donald Trump’s second presidency add to headwinds for local stocks.
After hitting multiple new highs last year, India’s nearly US$5 trillion equity market has come under pressure due to foreign outflows sparked by fears over falling consumption.
The aggregate market value of companies included in the MSCI India Index has declined by US$556bil after the gauge fell more than 13% from a September peak.
“Indian markets are navigating a bout of uncertainty,” said Mohit Khanna, a fund manager with Purnartha Investment Advisers Pvt, who manages more than US$250mil of assets.
“The pessimism can be attributed to multiple domestic and global developments that took place in 2024 and will impact local shares over a short term.”
Worries over India’s growth ambitions are intensifying after the latest government figures show the economy will expand 6.4% in the current fiscal year, well below the 8% average of the past three years.
Vehicle sales fell in December, while consumer companies have flagged challenging market conditions.
HSBC Holdings Plc strategists including Herald van Der Linde downgraded Indian stocks to neutral last week, saying investors will likely re-evaluate their positions after consensus reduced financial year 2025 earnings growth estimates for the Nifty 50 to 5% from 15%. — Bloomberg
