India’s Equities Show Signs of Winning Back Investors

The BSE Sensex has fallen 11 per cent since January, leaving it about 21 percentage points behind the S&P 500 and 36 points behind Japan’s benchmark, according to the source. India’s reliance on imports for 85 per cent of its oil and gas has made the market vulnerable to surging energy prices amid Gulf clashes involving Iran, neighbouring countries and the US. Foreign institutional investors have withdrawn as much as $35 billion, India Capital Growth Fund said in November 2026.

The Nifty 50 rose 8.58 per cent in the week to 6 November, its biggest weekly gain since early 2021. The Sensex was up 10.5 per cent in November as of the article’s reporting date. Gaurav Narain, principal advisor to London-listed India Capital Growth Fund, attributed the market’s weakness to slowing earnings momentum, a correction after strong post-Covid gains, higher energy costs and related pressure on companies. He said India’s economy was “doing very well,” corporate governance was a positive and valuations near 16 times earnings were attractive. Narain said he expects nominal GDP growth of around 10 per cent a year for some time.

Eastspring Investments has also identified opportunities in Indian auto-component suppliers, hospital chains and selected quick-commerce platforms. Portfolio manager Yuan Yiu Tsai said domestic demand remained resilient, although higher food and energy prices were weighing on household purchasing power, particularly in rural areas. He said infrastructure investment and economic formalisation had broadened growth across industries and income groups. The Reserve Bank of India’s move to “calibrated tightening,” he added, pointed to a measured rather than aggressive tightening cycle.

MSCI’s November review added Adani Green Energy, Coforge, Life Insurance Corporation of India and Meesho to its Global Standard Index, and raised the weights of 11 other Indian stocks. The changes, effective 30 November, increased India’s share of the MSCI Emerging Markets Index. UTI International (Singapore) also listed a Nifty 50 ETF on the Singapore Exchange. The fund tracks the Nifty 50 Total Return Index and invests substantially in an India-listed UTI ETF that had about $7.5 billion in assets on 31 October 2026.

UTI said the Nifty 50 returned an annualised 12.2 per cent in dollar terms over the 25 years to 31 October 2026, compared with 10.2 per cent for the S&P 500. CEO Jermyn Wong said Indian valuations had fallen below their 10-year averages and the premium over other emerging markets had narrowed, though India was not cheap in absolute terms. Narain said his firm sees stronger opportunities in small and medium-sized companies and believes the IT sector can adapt to AI, with new-business contracts remaining strong.