Indian stocks may continue to decline for nearly 5 months as there will be sluggishness and withdrawal of foreign investors in income growth of companies. Fund managers and analysts believe that it is due to weakness in the world’s fifth largest economy.
This slippery started due to a sharp decline in profits growth of the country’s top companies. According to brokerage data, the income of the Nifty 50 companies increased by 5 per cent in the October-December quarter, which is an increase of one point in the third consecutive quarter after a two-point jump in two years. The major reason for this was the weakening of urban demand amid high prices and slight income hikes. Due to this, India’s economic growth is expected to be reduced to 6.4 percent in this financial year to 6.4 percent.
Harsh Upadhyay, Chief Investment Officer and Chairman of Equity at Kotak Mutual Fund, said that the returns of the markets in all areas could remain and soft with the increasing uncertainty of companies’ income less than expected and American charges. Kotak Fund manages assets worth about $ 56 billion. Most analysts hope that the market weakness will continue till the end of March.
Once the growth of the world’s fastest growing economy, foreign investors have also gone out in large numbers. He bought Indian shares of $ 12.1 billion from the beginning of 2024 till the market reached the highest level of the markets. Since then, he has sold shares worth $ 25 billion with shares of $ 12.31 billion sold from the beginning of 2025.
The allocation of fund managers for India is at a two -year low. The survey released by Bank of America this week revealed this out of which 19 per cent is a pure underweight position. Only Thailand’s performance in Asian countries was poor. Sat Duhra, the portfolio manager of the equity team in Jenus Henderson Investors (except Japan), said that the recent demonstration of China has also attracted foreign funds.
India’s slow economy also means that the profits of companies are unlikely to accelerate. Brokerage firm Jefferies has reduced the entire year profit estimate for 51 per cent of companies to be tracked, while JP Morgan says there are still high expectations for the next financial year. Duhra said that due to weak income and high evaluation, there is a possibility of pressure on India to many quarters. Despite the decline in markets, the assessment of shares is still higher by some standards.
First Published – February 20, 2025 | 10:47 pm IST