India equity outlook cut again as foreign funds seek value elsewhere in Asia

Business Recorder reported, citing a Reuters poll of 28 equity analysts taken between August 13 and 26, that India's stock market is projected to stand below its level from the beginning of 2026 by mid-2027. It would mark the third straight quarter that analysts have trimmed their view, as overseas money flows toward other Asian markets. Indian shares are already down over 7.0% this year, which would make 2026 their weakest annual result in a decade or more.

Gains in Japan, South Korea and Taiwan stand in sharp contrast to India, which is seen as an outlier in the region. Buyers have instead turned to Thailand, Malaysia and the Philippines, where prices look attractive, while AI optimism has lifted some technology-heavy markets. This year, foreign holders have offloaded about 2.4 trillion rupees ($25.1 billion) in Indian equities, favouring other options with lower valuations or more AI exposure. The rupee has lost 6% of its value to the dollar this year, while crude near $90 a barrel adds further strain.

The poll's median forecasts put the Nifty 50 at 25,556 by end-2026 from Tuesday's close of 24,334.55, rising to 26,300 by mid-2027 and 27,450 by end-2027. These are the lowest median forecasts since polling for those dates started last year. Domestic investors have cushioned the decline as systematic investment plans contributed over 319.61 billion rupees in July.