Indian equity markets are facing a sharp and sustained sell-off, causing significant losses amounting up to $1.3 trillion since their peak last year.
The NSE Nifty 50 is set to record a 10-day losing streak, which will mark the longest daily losing-run in the last 29 years. The previous time that Nifty fell for 10 sessions straight was in January 1996.
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The reason for the sell-off is broadly the foreign investor pull-out from Indian equities. Three months into 2025, global funds have net sold equities worth Rs 1.24 lakh crore, according to NSDL data.
The dramatic market decline is driven further by other negative global cues like the risks around US tariffs and the depreciating local currency. Firms are facing rising competition from new entrants across various sectors, according to HSBC. Public spending is not growing significantly, while private capex is yet to take off, it added.
The benchmark NSE Nifty 50 and the BSE Sensex have fallen 16.2% and 15.4%, respectively, from the previous peak, triggering the worst fall since 2020. In the broader market, the Nifty Mid-Cap 150 has fallen by 21.4%, while the Nifty Small-Cap 250 is down 26.2%.
Global Cues
Investors have been closely watching for the impact of the US tariffs and the recent developments have pushed risks higher. Domestically, the valuations were high, with low single-digit earnings growth. The expectations around earnings growth were high at 13-15%. While the companies delivered dull numbers coming up to 5%.
Slowdown in capital expenditure owing to general elections and state elections have further sustained the slump. The lower growth can also be attributed to the tight liquidity in the economy.
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