Indian equity markets have underperformed global and emerging-market peers following approximately 18 months [1] of market consolidation.
This trend is significant because it marks a period of relative stagnation for the Sensex and Nifty compared to the growth seen in major international indices. While some specific sectors and funds have managed to generate alpha, the broader market has struggled to find an upward trajectory.
Data indicates a stark contrast between Indian and U.S. performance. The Nifty 50 has seen a year-to-date performance of -7% [2]. In comparison, the Dow Jones has posted a gain of 0.17% [2], the S&P 500 has risen by 2.4% [2], and the Nasdaq has increased by more than 3% [2].
Nasser Salim, Managing Director at Flexi Capital, said the markets have undergone a prolonged consolidation phase. This range-bound condition has limited the upside potential for Indian investors while global indices continued to post modest gains [2].
The underperformance is attributed to these range-bound conditions, which have kept the indices from breaking out of their current patterns. This consolidation has lasted for about 18 months [1], creating an environment where the Indian market has lagged behind its global counterparts.
“The Nifty 50 has seen a year-to-date performance of -7%.”
The divergence between Indian and U.S. market performance suggests a period of valuation adjustment within India. While U.S. indices maintain positive momentum, the 18-month consolidation in India indicates that investors are weighing domestic headwinds against global trends, shifting the focus from broad index growth to sector-specific alpha generation.
