Indian Stock Market Faces a $1 Trillion Wipeout

In a dramatic turn of events, the Indian stock market has seen over $1 trillion erased from its value in just four months. This significant downturn has not only impacted local investors but also reduced India's share in the global market capitalization from over 4% to nearly 3%.

Understanding the Prolonged Downturn

The current market correction, marked by a 16% decline from its peak, is notably longer than typical adjustments, lasting over 165 days. Unlike previous downturns triggered by global crises, this one stems from domestic challenges such as poor corporate performance and continuous Foreign Institutional Investor withdrawals.

Corporate Performance and Economic Challenges

Despite the downturn, BSE100 companies have shown resilience with a 9% increase in revenues and a 32% growth in net profit during 2024, compared to the previous year. However, the slowdown in consumption and key industries like oil, gas, and steel has hurt value growth.

Future Outlook: A Silver Lining?

Morgan Stanley remains optimistic, maintaining a year-end Sensex projection of 105,000 points by December 2025. The firm highlights India's improving earnings growth and advantageous position in global trade disputes as key factors for potential recovery.

Global Market Turmoil: A Wider Perspective

The Indian stock market's decline is part of a broader global trend, with US equities also experiencing significant losses. Economic uncertainties and trade disputes have led to a $4 trillion decline in US market capitalization, with the technology sector hit hardest.