India’s “loyal retail traders” are being tested like never before, says Chiranjivi Chakraborty on Bloomberg. A long stock market boom ran into trouble in September, when an unanticipated economic slowdown and analysts’ downgrades to companies’ earnings forecasts knocked India’s richly priced shares – $1.2 trillion has since been wiped off valuations. Global funds withdrew an estimated $26 billion between October and February.
Local investors had kept things ticking along, but even they now appear to be losing enthusiasm, with inflows into domestic mutual funds down 30% since a record high in October. India has been an emerging-market darling in recent years, with the BSE Sensex Index surging 187% between the March 2020 Covid trough and September 2024. Yet, since then, the index has slipped more than 10%.
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