Daijiworld Media Network- Mumbai

Mumbai, Aug 21: After scaling record highs in early 2024, India’s benchmark Nifty 50 index has lost momentum, weighed down by sluggish corporate earnings, persistent foreign institutional investor (FII) outflows, and mounting global trade tensions.

So far in 2025, the index has posted modest gains of 3.56%, but trails significantly behind global peers. South Korea’s Kospi has soared 30.48%, Hong Kong’s Hang Seng is up 28.25%, while Germany’s DAX has risen 21.24%. The FTSE 100 has advanced 12.45%, China’s CSI 300 11.81%, Japan’s Nikkei 7.50%, and the S&P 500 has gained 8.45%.

“Nifty’s underperformance this year has largely been driven by global headwinds, with FIIs pulling out over USD 13 billion since January,” said Prashant Tapse, Senior Vice President–Research at Mehta Equities. He added that rising US bond yields, a stronger dollar, and escalating global risk aversion have further dampened appetite for Indian equities.

Adding to the concerns, fears of fresh tariff hikes on Indian exports from US President Donald Trump have unsettled investor sentiment. At home, corporate earnings have remained sluggish for five straight quarters, piling additional pressure on markets.

Nifty in 2024

Last year, the Nifty posted an 8.8% annual gain—its ninth consecutive year of growth—but still lagged behind global benchmarks. The index rallied 21% by September before sliding 10% in November amid sustained foreign selling. In comparison, the S&P 500 surged 23.3%, Japan’s Nikkei 225 19.2%, China’s CSI 300 14.7%, Germany’s DAX 11.3%, and the UK’s FTSE 100 rose 5.7%.

Outlook

Despite prevailing challenges, analysts say the Nifty continues to hold above key technical support levels. The index trades above its 21-day moving average of 24,765 and its 100-day moving average of 24,591.

“Unless there is a clear easing of global trade frictions and stabilization in FII flows, market sentiment is unlikely to witness a sustained northward move,” Tapse cautioned.