The Sensex has struggled this year, falling behind many international markets. Foreign investors have been pulling money out, while neighboring Pakistan and several Asian economies have posted strong gains.
How the Sensex Stacks Up
Even though the Sensex reached a new high earlier this year, its overall gain is just under 9% for 2025. By contrast, Pakistan’s KSE 100 index has risen about 52%, making it one of the top performers worldwide.
Global Comparisons
- South Korea (KOSPI): +68%
- China: +16%
- Hong Kong: +28%
- Japan: +29%
- U.S. S&P 500: +15%
- U.K. FTSE 100: +21%
All of these markets have outpaced the Sensex by a wide margin.
Why Foreign Investors Are Leaving
Several factors have made Indian equities less attractive to foreign institutional investors (FIIs):
- The rupee has weakened, reducing returns when converted back to foreign currencies.
- Earnings growth has slowed, lowering profit expectations.
- A 50% tariff on Indian exports to the United States, introduced by former U.S. President Donald Trump, has hit trade prospects.
In the past year, FIIs have sold roughly ₹156,852 crore of Indian shares.
Can the Market Bounce Back?
Analysts say the market could regain its momentum once two things improve:
- Clear progress on the India‑U.S. trade talks, which would ease tariff concerns.
- Return of foreign capital as earnings pick up again.
Domestic factors remain strong: GDP growth is around 8.2%, the RBI has cut rates, tax measures are supporting consumption, and festive demand is boosting activity.
What Experts Are Saying
Harshal Dasani (INVAsset PMS) notes that the only major drag is FII caution linked to trade‑deal uncertainty.
Kranthi Bathini (Wealthmills Securities) expects earnings to recover and FIIs to come back by mid‑2026, staying bullish on Indian stocks.
Global brokers are also more positive. Goldman Sachs upgraded its rating on Indian equities to “overweight,” and HSBC did the same, citing better valuations and strong domestic investor flow.
Bottom Line
While the Sensex has lagged behind its global peers, the fundamentals at home are solid. The market’s next rise will likely depend on external trade clarity and a rebound in foreign investment.
Disclaimer
Remember, this is perspective, not a prediction. Do your own research and consider consulting a certified financial advisor before making any investment decisions.