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Indian stocks on the decline: investors withdraw capital


January, 30 2025
watermark Economic news

Since the beginning of autumn, the Indian stock market has been showing a decline caused by fears of foreign investors regarding the slowdown in the country's economic growth. The Nifty 50 and Sensex indices fell to their lowest values in more than 7 months. According to Goldman Sachs, the real estate, energy and automotive sectors were the most affected.


A slowdown in GDP growth to 5.4% in the third quarter, as well as a decline in company profits in the second quarter, triggered a market correction. This figure was the lowest in the last seven quarters.


Foreign investment in the Indian market fell by 99% in 2024, totaling only $124 million. The main reason was the rise in yields on US Treasury bonds, diverting capital to the American market. In this regard, HSBC downgraded the rating of Indian stocks to "neutral" and revised the forecast of Nifty 50 profit growth for 2025 from 15% to 5%.


However, Indian investors continue to support the market, having invested about $27 billion since October. Experts consider the current correction to be «healthy», expecting long-term growth, especially in the areas of IT and private banking.


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