A Pedestrians wearing a protective mask pass through the Mumbai Stock Exchange (BSE) building of Mumbai, India. Nifty 50 and Sensex have recently slipped to the lowest point of more than six months
Bloomberg | Bloomberg | Getty image
Since September, Indian stocks have been declining because foreign investors have scared their shares because of the slowdown of the country’s economy. Analysts regard it as “health correction.”
India’s benchmark stock index Nifty 50 Sensex and Sensex wandered at a low point of more than seven months, and have been firmly in the field of correction since September.
According to Goldman Sheng’s data, real estate, energy and automobile departments have always been the biggest partial sales.
This development began last year. At that time, Nifty 50 always maintained a record high. Most of the performance is better than the Standard Purcell 500 One year.
AB Bernstein’s Indian research leader Venugopal Garre said: “Bubbles are long buildings, but admit that it is the most recent.” He attributed the frustrating prospects to the slow and economic growth of India’s second fiscal quarter.
The performance of Nifty 50 in the past year
GDP in India has expanded As of the quarter of September, it rose 5.4 %, marking THis growth rate is the slowest In the past seven quarters. The government recently Reduce its economic growth estimate The fiscal year as of March was 6.4 %, which was the lowest in four years.
Data and analysis The company’s capital economics said in a recent explanation: “After excellent operation, the Indian economy has entered a softer patch and will continue in some quarters.”
Harry Chambers, an assistant economist at Capital Economics, wrote: “We believe that compared to other major benchmarks, this will indicate that the performance of local stocks is not good.”
HSBC reduced its rating of Indian stocks to “overweight” earlier this month. The bank also reduced the Nifty 50 surplus forecast of fiscal 2025 from 15 % to 5 %.
Foreign Investors Exodus
Foreigners used to Indian stock average seller in the past four monthsAccording to the data of the Store Store in India, the country’s growth was turbulent.
Data show that compared with the previous year, 99 % of foreign investment portfolio investors inflow into Indian stocks were only $ 124 million in 2024.
In the past few weeks, the outflow has increased sharply. As of January 28, foreign investors have withdrawn approximately $ 8.3 billion from Indian stocks.
James Thom, a senior investment director of ABRDN, said foreigners are still the net seller of Indian stocks. Tom added that India has rotated, and stocks in emerging markets have included US stocks.
He told CNBC: “In the past year, foreigners have basically been absent in Indian stories.”
Tom said: “This is a view of risk adjustment, that is, (investor) can get better and safer returns in US stocks.” “So why should you take risks and be so -called risks as India?”
Rana Gupta, managing director of Manulife Investment Management, said India’s economic slowdown was also unprecedented when the U.S. Treasury output obtained momentum. As bonds become more attractive, the high national treasury yields often make investment take away from the stock market.
After COVID received a huge return of four years, the Indian stock market is undergoing cyclical integration.
Pramod Gubbi (Pramod Gubbi)
Co -founder of Marcellus Investment Manager
The profits booked by foreign institutional investors have also put huge pressure on India’s stock market.
Kotak Mahindra Asset Management Director Nilesh Shah told CNBC: “When the market has done a good job in such a long time, the investment portfolio has a lot of profits.”
He added: “This profit booking of FPI has led to a lower price supply, resulting in a decline in bidders, which leads to correction.”
Profit reservation involves the sale of investment to obtain returns after the asset rises, rather than holding it indefinitely. When traders sometimes make a profit booking It is believed that stocks or assets are overestimated or reached a peakEssence
SHAH added that some foreign investment portfolio investors who earn a lot of profits in Indian stocks are easy to book more profits to view higher valuations.
“Strike” of domestic investors
In contrast to foreign currency outflow, local investors in India continue to pour into the Indian market, partly due to the deeper level of stocks from falling.
Data provided by Manulife show that since October, domestic investors have brought together about $ 27 billion in Indian stocks.
Praveen Jagwani, CEO of Uti International, asset management company, said that between 2020 and 2024, domestic stock investors of India’s domestic stock investors have been moving mini beer since September.
Jagwani added: “Thousands of retail investors have entered the attack of stocks with suspicious basic principles to increase the valuation of India.” “In order to increase sustainable equity growth, a healthy callback is required.”
Although the recent prospects of Indian stocks may seem dim, some analysts believe that the long -term fundamentals are still strong and have rebounded.
Just a healthy correction?
Pramod Gubbi, co -founder of Marcellus Investment Manager, said: “The return rate of four years after COVID is high, and the Indian stock market is undergoing cyclical integration.” “I think this is a health correction.”
Gubbi added that if it is sold out, the valuation becomes more reasonable, it may attract a group of new investors, which are present for the valuation problems.
“In 2023 and 2024, the Indian stock market ran too fast. It is currently a healthy recovery of a healthy average,” the Jagwani of Uti International echoed.
Nifty 50’s annual yield in 2024 was nearly 9 %, which was about 19 % in 2023.
Tom (Thom) of ABRDN said that although there were some callbacks in the short term, in the long run, he was a “huge opportunity” for Indian investors, especially in the domestic IT and private banking industry. Essence
Although speculators may focus on quarterly fluctuations in the economy, Kotak’s Shah said that long -term investors do not have to worry: “(this is) the nightmare of speculators, the joy of investors.”
