Indian Stock Market Underperforms Globally in 2025, Experts Predict 2026 Recovery

Sensex, definitely the worst performer in 2025. In terms of volume, New Delhi, 31.12 (Agency): The performance of the Indian stock market has not been so good this year. In dollar terms, the Sensex and Nikkei have given 4-5% returns. As a result, the performance of the Indian stock market is the worst compared to other stock markets in the world. In such a situation, the performance of other capital markets in the world is weak. In currency terms, the Sensex and Nikkei have given returns of about 8 to 9%. But due to the weakening of the currency against the dollar, foreign investors have not been able to get the desired returns. As a result, foreign investors have withdrawn capital of 18 billion dollars from the market. Foreign investors have never withdrawn so much capital from Dalal Street in a calendar year. In such a situation, looking at other capital markets of the world, South Korea's KOS has given a return of about 81%. Similarly, Brazil's Bovesca has increased by 48%, Germany's DAX by 38%, and the return of the Stock Europe 600 has increased by about 32%. Among developed markets, the S&P and NASDAQ have increased by 17.4% and 21.6% respectively. India was once a prominent place among the growing capital markets. But in this regard, India has completely fallen. Both domestic and global markets have seen diversification. The growth of semiconductor and software stocks in the Chinese and South Korean markets has been noticeable. Issues like AI and re-rating have helped in its growth. But this situation has not been seen in India. SBI Securities expert Sunny Agarwal said that NSE and Sensex have become the worst performing indices in the current calendar year. Profits fall, valuation returns fall by 4-5%, rupee value falls, foreign investors are disappointed, the highest capital withdrawal in the calendar year, Korean market has given the highest return of 81%, recovery is expected in 2026. Despite such effects, experts are hopeful that the Indian capital market will recover in 2026. Ms. Kapoor said that India's strong growth and policy measures are likely to boost the market. Income tax and GST reduction will help increase demand. If the India-US trade agreement is signed, it may reduce tariffs. The RBI may cut interest rates by 50 basis points in the next two monetary policy meetings. The benefit of which will be directly shared by the market. Nomura's S N Mukherjee estimates that the NIF may touch 29,300 levels by the end of 2026. Foreign investment may improve to some extent. Franklin Temple Lawton expects moderate growth in returns. As companies are earning double-digit profits, this will help attract foreign investors, said Niles Shah, MD, Kotak Mahindra AMC. If the rupee strengthens in 2026, it will help maintain balance in the Indian capital market, said Amish Shah, CEO, BOFA Securities. Issues such as overvaluation, AI play shortage and war have hurt the market. Valuation growth has not suited foreign investors. Garima Kapoor of Elara Securities said that foreign investors have been cautious about investing in the Indian market since August 2024 due to uncertainty in the global markets.