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Mon, 05 Oct 2026

Mon, 05 Oct 2026 Five reasons India's stock market is sinking even when its economy is growing

The world's fastest growing major economy has one of the worst performing major equity markets in 2026.

* India's economy has grown over 7% despite global challenges, but its stock market has performed poorly.
* The benchmark Sensex and Nifty indices have posted losses for eight straight weeks, their longest losing streak in 25 years.
* Indian mom-and-pop investors who put money into the Nifty have seen a 15% decline in wealth this year.
* Foreign institutional investors have withdrawn $40bn from Indian markets over the past two years.
* Domestic savings into mutual funds have continued to flow in despite the market correction.
* Stock valuations have been another major concern, with Indian stocks still expensive relative to their earnings compared to other emerging markets.
* India's economy is heavily reliant on imported crude oil, which has seen prices rise due to disruptions to shipping through the Strait of Hormuz and trade tensions with Russia.
* Higher interest rates globally have also made riskier emerging market assets like Indian equities less attractive to foreign investors.