BSE Sensex and Nifty50 have been in a free fall for several sessions now. The situation is particularly severe in smallcap and microcap segments. Foreign institutional investors have withdrawn Rs 1 lakh crore from Indian markets in 2025. The impact is substantial, with Nifty components declining up to 42% from their highest points, led by Tata Motors’ significant drop. The third quarter’s earnings results showed modest Nifty growth of 5% year-on-year, failing to alter the market’s cautious sentiment. The stabilisation is anticipated from the next quarter, driven by three key factors: reduced concerns about Trump tariffs, completion of earnings downgrades, and anticipated emergence of indicators showing recovery in discretionary consumption demand. It’s important to note that Emkay Global maintains its December 2025 Nifty target of 25,000, suggesting the market becomes attractive at 22,500 Nifty. The country’s long-term economic indicators are expected to rise from 6.4% to 7.0% in FY25 to FY26, according to Geojit Financial Services.
