India’s NSE Nifty 50 Index is on track for its worst monthly performance since the onset of the COVID-19 pandemic in March 2020, as foreign investors continue offloading Indian equities. The index has dropped nearly 6% in October, marking its first monthly decline since May, driven by weaker-than-expected earnings and high valuations that exceed historical norms.
Foreign institutional investors have sold over $10 billion in Indian stocks through October 29, raising concerns about sustained outflows impacting near-term market performance. According to a Citigroup Inc. report, this month’s correction has lowered valuations somewhat, though they remain nearly one standard deviation above long-term averages, indicating further potential risks to the index’s stability.
Analysts highlight that while the dip has brought some moderation to valuations, global market dynamics and continued foreign withdrawals could limit any rapid rebound in Indian stocks.
