Analysts point to three major factors behind the decline. First, foreign institutional investors have shifted funds toward markets such as China, Japan, and South Korea, attracted by relatively cheaper valuations and improving economic prospects. Second, concerns over slowing corporate earnings growth and elevated stock valuations have reduced investor enthusiasm for Indian equities. Third, global uncertainties, including interest rate expectations and geopolitical tensions, have prompted investors to seek safer or more attractively priced markets.
Despite the recent setback, experts note that India's long-term economic fundamentals remain strong, supported by robust GDP growth, rising domestic consumption, and increasing participation from retail investors. However, the latest ranking highlights the growing competition among Asian markets for global investment capital.
