The Indian stock market has experienced a significant downturn, standing out as the sole underperformer among emerging markets over the past three months. This decline comes amid a broader rally in other Asian markets, raising concerns about India's economic outlook and investor sentiment.

Nifty 50's Decline and Rupee Depreciation

The Nifty 50, India's benchmark stock index, has fallen by 5.00% over a three-month period, making it the only emerging market to post negative returns during this timeframe. Simultaneously, the Indian rupee has hit a record low of 88.31 against the US dollar, depreciating by over 3.00% in three months—the steepest drop among Asian currencies.

Contrasting Performance with Other Asian Markets

While Indian markets struggled, other Asian indices showed remarkable strength:

This stark contrast highlights the unique challenges facing the Indian market in the current global economic landscape.

Foreign Investment Outflows and Domestic Support

Foreign portfolio investors (FPIs) have been net sellers in the Indian market, with significant outflows observed:

• Recent outflow: $1.00 billion worth of shares sold on a single Friday
• Year-to-date outflows: $15.20 billion

Analysts attribute this exodus to several factors:

• Slower earnings growth expectations
• High valuations compared to peer markets
• Heightened geopolitical risk perceptions

However, domestic investors have shown resilience, injecting $58.00 billion into the market during the same period, partially offsetting the foreign outflows.

Valuation Concerns and Growth Projections

The Nifty 50 currently trades at a premium compared to its Asian counterparts:

Despite the high valuations, analysts project modest growth for Nifty 50 companies, with earnings per share (EPS) expected to increase by approximately 9.00% in FY26.

Bond Market Reaction

The equity market turbulence has coincided with movements in the bond market:

• The benchmark 10-year bond yield has climbed to 6.57%
• This surge is attributed to stronger economic data
• Expectations for near-term interest rate cuts have diminished

As India navigates these challenging market conditions, investors and analysts will be closely monitoring economic indicators, corporate earnings, and global market trends for signs of potential recovery or further volatility.

Indian stock markets opened in negative territory on Wednesday, reacting to the implementation of 50% US tariffs on Indian goods. The Nifty 50 index was trading at 24,586.80, down 125.25 points (0.51%), while the Sensex stood at 80,378.10, lower by 408.44 points (0.51%) in early trade.

Impact of US Tariffs

The new tariffs have significantly impacted India's trade position with the United States. India's effective tariff rate on exports to the US has jumped to 34%, now second only to China. This move is expected to put immediate pressure on export-dependent sectors, including textiles, jewellery, leather, and seafood.

Sector-wise Performance

Despite the overall negative sentiment, some sectors showed resilience:

• Pharma, electronics, and steel stocks demonstrated strength, likely due to exemptions from the tariffs.
• Asian Paints emerged as a top gainer, rising 1.55% to ₹2,519.90.
• Shriram Finance led the losers, falling 2.47% to ₹580.00.

Institutional Activity

The market saw significant institutional activity:

Technical Outlook

Technical analysts have warned that a sustained break below the 24,600 level could potentially drag the Nifty toward 24,450. Increased volatility is expected due to the monthly derivatives expiry.

Corporate Update: Asian Paints

Asian Paints Limited announced that it would be transferring unclaimed equity shares to the Investor Education and Protection Fund (IEPF) Authority. This move is in compliance with Section 124 of the Companies Act, 2013, and the related rules. Shareholders who have not claimed their dividends for seven consecutive years or more are advised to claim them by November 7, 2025, to avoid the transfer of their shares to the IEPF Authority.

As markets navigate through these challenging times, investors are advised to stay vigilant and monitor both global trade developments and domestic corporate actions that could impact stock performance.