Last week’s informal poll indicates that investors’ perceptions of India are changing. According to a different study, the current surge in Chinese equities may slow, and by the end of the year, the CSI 300 Index is probably going to show a little 1.2% increase.
Nifty set for rebound
As market observers place their hopes on a possible trade agreement with the US and reductions in consumption taxes to help fuel a recovery, Indian equities are set to recover from a difficult period.
The majority of respondents to a Bloomberg poll of 30 strategists and investment managers believe that the NSE Nifty 50 Index might recover its 3.6% fall in the three months leading up to September. By the end of the year, over one-third of the participants believe the gauge will have risen by at least 5.5% to exceed its prior high.
This will put the index on track for its tenth consecutive year of gains and help it reduce its underperformance versus regional counterparts. In the past, only Nikkei has performed better, with its 12-year surge occurring around 40 years ago.
India market sentiment shifts
Last week’s informal poll indicates that investors’ perceptions of India are changing. According to a different study, the current surge in Chinese equities may slow, and by the end of the year, the CSI 300 Index is probably going to show a little 1.2% increase.
With some experts pointing to a crowded AI trade in the area, investors are placing bets that the Reserve Bank of India would turn the tide in the market’s favor by lowering consumption taxes and cutting interest rates. Following a 50% tax, India has also reopened trade talks with the US in hopes of reaching an agreement.
Karim Al-Mansour, managing director of the London-based hedge firm Amanah Capital, said that any favorable decision regarding the US tariff might serve as an instant market stimulant. “Even the basic view indicates that a recovery is probably going to start in the year’s last quarter, with more improvements in 2026.”
Investors optimistic on Nifty
More than one-third of poll participants anticipate the benchmark index to beat rivals, while over half believe it will perform similarly to comparable Asian gauges this quarter. Even if a raise in the H1-B visa cost and new US levies on patented medications negatively affected investor mood, poll respondents anticipate that Indian stocks will continue to grow next year due to improved profitability.
The benchmark gauge has lagged behind other Asian counterparts, rising just roughly 4% this year—its weakest advance since 2022. Given that HSBC Holdings Plc analysts have upgraded their view on local equities to overweight, citing reasonable prices in comparison to peers, that may provide an opportunity for certain investors to purchase Indian stocks.
According to statistics gathered by Bloomberg, the Nifty 50 is now trading at 19.8 times its 12-month future earnings, down from a multiple of 21.3 a year ago. The indicator saw its first monthly increase since June in September, indicating a change in direction.
Foreign outflows balanced by locals
According to poll participants, there are still risks associated with Indian stocks, including as a possible collapse in trade negotiations with the US, weak urban consumption, and ongoing outflows of foreign capital.
This year, foreign investors have taken about $17 billion out of the country’s stock market. However, unprecedented purchases made by local institutions have counterbalanced the effect of outflows. For the fourth consecutive week, inflows into US-listed India exchange-traded funds indicate that passive buyers are now taking over.
According to Jimeet Modi, founder of Mumbai-based Samco Securities, “the majority of the negatives are priced in and we are ready for a bounce-back.” “A major upside might result from any reversal in foreign selling.”