Asia's favorite stock market turns least liked
India's stock market has dropped from Asia's favorite in May to the least liked by August 2024.
The main reason? Tougher US tariffs and growing trade tensions have shaken investor confidence, with 30% of global fund managers reducing their exposure to Indian stocks.
This shift has led to about $4 billion flowing out of the country's markets this quarter.
Domestic investors still bullish
Foreign investors are pulling out, but local investors aren't giving up—domestic mutual funds just saw a record ₹427 billion ($4.9 billion) pour in during July 2024.
The split shows how differently global and Indian investors see the future, making things unpredictable for anyone watching or investing.
US tariffs on Indian goods hit local markets hard
The mood soured after US President Trump raised tariffs on Indian goods by 50% last year, blaming India's continued Russian oil imports.
That move ramped up trade friction and hit sectors like auto parts, textiles, and gems & jewelry especially hard.
On top of that, India's stock market lagged behind other Asian countries—China even beat India by eight percentage points in July—thanks to slow earnings growth and high valuations scaring off foreign money.