Indian Markets Face Global Headwinds Despite Strong Economy: What's Next?

• Indian markets started 2026 poorly, with benchmark indices declining and bond yields rising, despite harmonious monetary and fiscal policies.
• Foreign investors pulled $3 billion from domestic markets in the first three weeks of the year, and the Indian rupee hit new lows.
• Global uncertainty, including geopolitical tensions highlighted at the World Economic Forum in Davos, is significantly impacting Indian markets.
• Despite a resilient economy, strong growth projections, and low inflation, foreign investors remain unconvinced, unlike domestic investors.
• Corporate earnings, household debt, rural economy vulnerability, and slow private capital expenditure are key concerns, suggesting the economy isn't as robust as perceived.

Why It Matters: Despite a strong economic outlook, global uncertainties and domestic challenges are hindering Indian market performance.