India's Stock Market Falls Despite 7% Growth — SkimNews
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- India's economy is growing at over 7%, outpacing most major economies amid global disruptions, yet its equity markets have delivered among the worst returns globally in 2026.
- Crude oil prices have remained between $90 and $100 per barrel due to prolonged disruption in the Strait of Hormuz, straining India’s inflation, corporate margins, and macro outlook.
- Foreign institutional investors have withdrawn $40bn from Indian markets over the past two years, with net foreign investment over the past decade nearing zero.
- The rupee's depreciation has worsened dollar-denominated returns for foreign investors, limiting the appeal of Indian equities despite recent valuation corrections.
- Indian large-cap companies are seen as representing an outdated economic model, with limited investment in future-facing sectors like AI, according to Bernstein Research.
- Domestic mutual fund assets have surged from $125bn in 2016 to $900bn in 2026, with retail participation tripling to 150 million, helping cushion the market’s fall.
Why it matters: Indian households are losing wealth just as inflation and weak job growth strain budgets, while the absence of globally competitive tech firms means foreign capital stays away—undermining long-term market resilience despite solid GDP growth.
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