Indian stock market faces worst start in a decade as Modi faces mounting pressure with new budget
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Glonghui, January 28|The Indian stock market is heading towards its worst annual start in a decade, putting immense pressure on the government led by Prime Minister Modi, which urgently needs to introduce new economic growth catalysts through the upcoming fiscal budget. Following last year's implementation of income tax cuts and reductions in consumption tax, the market is now focused on whether the Indian government will boost fiscal revenue by increasing defense spending and accelerating the sale of stakes in state-owned enterprises. The Indian market is facing pressure across all assets—stocks, the rupee, and bonds are all weakening simultaneously, and investors are hoping the budget will revive market sentiment. So far this year, the Indian stock market has fallen by about 4%, with the NIFTY index recording its worst annual start since 2016. Global funds continue to be net sellers of stocks, and large-scale bond issuances are further suppressing the bond market. According to data compiled by institutions, the market capitalization of India's domestic stock market has evaporated by about 360 billions USD this month.
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