India’s Finance Minister says easy exits and excess liquidity fuel equity market's underperformance
India's Finance Minister has warned that easy market exits and excess liquidity are contributing to equity market underperformance. Persistent capital outflows remain identified as one of the primary macro risks for the economy.
- SSPX
Domestic Indian market structural warnings have limited spillover to global indices.
India's Finance Minister expressed concerns regarding domestic equity market dynamics, pointing to easy investor exits and excess liquidity as factors complicating stability. Continued foreign capital outflows have exerted downward pressure on local indices, creating a challenging environment for retail and institutional participants alike. Officials highlighted that managing these structural capital shifts is vital to protecting the broader financial ecosystem against external shocks. Sustained selling by foreign portfolio investors has tested market resilience despite robust domestic mutual fund inflows. Policymakers are actively evaluating measures to encourage long-term holding patterns and mitigate the impact of sudden liquidity withdrawals.
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