India's economy is expanding at over 7%, yet its stock market is among the worst performers globally in 2026. Retail investors have seen a 15% decline in wealth this year, contrasting sharply with gains in other markets like Korea's Kospi index.
Several factors contribute to this disconnect, including high crude oil prices, a weaker rupee affecting foreign investment returns, and relatively high stock valuations compared to earnings. Despite a significant increase in domestic mutual fund investments, foreign investor interest remains subdued.