Has the Indian stock market "hit bottom"? Disagreements emerge on Wall Street
The Indian stock market has recently corrected, with the benchmark index Nifty 50 falling for three consecutive days, down more than 10%. Wall Street has mixed views on the future trend, with HSBC lowering its growth forecast for Nifty 50 to 5%, rating it as neutral; while Bernstein believes the market has bottomed out and expects it to rise to 26,500 points by the end of the year. Morgan Stanley and Citigroup also hold an optimistic outlook, expecting economic growth and market returns to improve. BNP Paribas pointed out that the market is in a weak phase but may soon recover growth
The Indian stock market has entered a correction phase; can it regain its upward momentum?
The Indian stock market started poorly in 2025, with the benchmark Nifty 50 index having fallen for three consecutive days, accumulating a decline of over 10% since the peak at the end of September last year, re-entering the adjustment range.
This stands in stark contrast to the bullish sentiment on Wall Street towards Indian stocks at the beginning of 2024, when analysts expected Indian stocks to outperform the S&P 500 index. Looking ahead, Wall Street has differing views on the future trajectory of the Indian stock market.
Herald van der Linde's team of strategists at HSBC in the Asia-Pacific region stated in a report on Thursday that due to disappointing corporate earnings, they have lowered their growth forecast for the Nifty 50 index for the fiscal year 2025 from 15% to 5%, and downgraded the rating of the Indian stock market to neutral.
However, most opinions remain optimistic about Indian stocks.
Bernstein strategist Venugopal Garre believes that the Indian stock market has bottomed out, expecting economic growth to accelerate in the next 3-6 months, with the Nifty 50 index reaching 26,500 points by the end of this year, a 13% increase from current levels.
Morgan Stanley indicated that the Reserve Bank of India may reduce the fiscal deficit when it announces the budget in February, which could lower bond yields and reduce borrowing costs for companies.
Citigroup equity strategist Surendra Goyal shares a similar view, expecting the Indian economy to grow by 6.5% this year, primarily driven by government infrastructure spending:
“Considering that market valuations are more reasonable after the recent adjustments, we have a constructive view on stock market returns. We expect the Nifty 50 index to reach 26,000 points by the end of the year, a 10.5% increase from current levels.”
Abhiram Eleswarapu, head of Indian equities at BNP Paribas, stated that the Indian market is currently in a "soft phase," as valuations are at a high level. However, this "slight correction" may soon come to an end, and the Indian stock market could return to high single-digit growth from March to the end of the year.
Goldman Sachs' industrial analyst for India, Pulkit Patn, also expects that with increased fiscal spending on infrastructure and high demand for residential housing, India's cement industry will expand robustly in the second half of this year, leading to relatively strong demand for infrastructure and related materials.
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