Indian stocks on historic losing streak as foreign investors continue exiting

Indian equities are facing an unprecedented losing streak, with the NSE Nifty 50 Index heading for a 10th consecutive day of decline. The benchmark index fell as much as 0.7% on Tuesday, hitting its lowest level in nine months and extending losses to 16% from its September peak, according to Bloomberg.

The primary driver behind the selloff has been persistent foreign investor outflows, with global funds withdrawing nearly $14 billion from Indian markets this year. Analysts attribute the trend to concerns over slowing economic growth and high valuations, which have made Indian stocks less attractive compared to other emerging markets.

The rapid shift in sentiment marks a stark contrast from just a few months ago when India was a preferred destination for emerging-market investors. A rebound in Chinese equities and a stronger U.S. dollar have further weakened the appeal of Indian assets.

Despite the downturn, recent government initiatives to spur domestic consumption and ongoing negotiations with the U.S. for a bilateral trade agreement could provide support to the stock market. Additionally, oversold technical indicators and reduced demand for hedging suggest a potential near-term recovery.