Stories
Nomura warns Indian market decline reflects deeper structural growth concerns
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News18•06-10-2026, 20:15
Nomura warns Indian market decline reflects deeper structural growth concerns
- •Nomura's recent report indicates that the current drop in Indian equities stems from deep-rooted growth worries rather than just higher crude prices and geopolitical tensions.
- •Unlike earlier corrections where oil and domestic sectors lagged, the recent phase saw IT services and non-banking financial companies record the steepest declines.
- •Relative growth expectations have shifted toward the US due to strong artificial intelligence investments, with S&P 500 earnings growth outpacing India's BSE universe.
- •The India-US 10-year yield spread has narrowed to a 22-year low of 190 basis points, prompting foreign institutional investors to net sell USD 12.5 billion in Indian equities.
- •Nomura has lowered its Nifty valuation multiple and March 2027 target, advising investors to remain valuation conscious and selective on growth.
Key Questions Answered
Nomura reports that the stock market correction reflects deeper structural worries regarding India's long-term growth outlook, driven by geopolitical realignments, technological disruption, and policy risks, rather than just higher crude oil prices.
Nomura lowered the valuation multiple assigned to the Nifty to 17 times one-year forward earnings from 18.5 times and set a March 2027 Nifty target of 24,000.
The India-US 10-year yield spread narrowed to 190 basis points, its lowest level in 22 years, prompting foreign institutional investors to net sell USD 12.5 billion of Indian equities in FY27 so far.
