US President Donald Trump | Photocredit: Alexander Drago
Call it a case of bad timing for Indian Stock Bulls. Donald Trump has assigned two new strokes to the sentiment of investors, just when the market showed signs of a change.
The MSCI India Index has fallen in all five sessions since the US President has signed an order to revise the H-1B visa program program-a step that is at the risk of the Indian software service sector of $ 280 billion. His plan to impose a 100 percent duty on brand or patented medicines saw Indian medicine makers add an Asia-wide sale on Friday.
Prior to these shocks, the MSCI meter meter three consecutive weeks had risen, with more than 4 percent added to what the longest run was since May.
Trump’s newest salvos have also shaken foreign investors, who finally have the penalties of 50 percent American rates for India that have sent the relationships between the two nations. Worldwide funds became sellers of Indian shares in recent sessions after two weeks of purchases.
“Escalende American – India voltages add a different pressure layer,” said Jian Shi Cortesi, a fund manager at GAM Investment Management in Zurich. “The accompanying headlines offer investors an extra push to take away from India to markets that show a stronger momentum, such as China and South Korea.”
Limited by a delay in economic growth and the pace of the expansion of the company profits, Indian shares have difficulty retaining their momentum in 2025 after six consecutive years. The MSCI India meter has risen around 2 percent this year and follows a broader size of Asian shares with more than 19 percentage points after surpassing the above 2021-2024.
Expectations reset
At the end of the year, investors pricked in shares, stimulated by Prime Minister Narendra Modi movement rather to lower national consumption tax that came into force on September 22, the continuous focus of the central bank on growth, and bets that the resumption of trade negotiations with the US will lead to a positive outcome.
Those expectations are assessed after the last actions of Trump.
The MSCI India meter fell around 3 percent this week since February. A measure of IT shares lost 7.9 percent for five sessions, the most since April. The technical sector controls a road of almost 10 percent on the MSCI-meter-de at the age of two.
In the past, Indians have made more than 70 percent of the H-1B visa. Economists have warned that the visa is changing that the influx of transfers runs the risk, and the local currency can weaken, with the worst artists in Asia. The rupee slid on Tuesday to a record low point in the midst of ensuring that the export of Indian services could suffer in addition to his rate-affected merchandise export.
An index of drug makers lost more than 2 percent on Friday to register the worst daily performance since the beginning of August after the last rate of Trump.
“The underperformance of the Indian asset prices seems to be going on,” the analysts of Kal Research Udith Sikand and Tom Miller said in a note. “The longer the 50 percent rates remain in force, the greater the chance that the economic growth of India will disappoint.”
In 2025, foreign funds sold around $ 16 billion worth around $ 16 billion. That is on the way to be the second greatest outflow ever after a record of $ 17 billion admission in 2022. The performance of the market would have been much worse this year, if not for the strong stock purchases by local institutions.
‘Silent Hoek’
Some market guards, such as strategists at HSBC Holdings PLC, are more optimistic. A team led by Herald van der Linde this week has upgraded their position on Indian shares to the overweight of Neutral.
“In stark contrast to the busy transactions in Korea and Taiwan, India is the quiet corner of Asia,” they wrote. “Although the expectations of profit growth can fall a little further, valuations are no longer a concern, government policy is a positive factor for shares and most foreign funds are lightly positioned.”
The MSCI India meter acts 21.8 times his 12-month profit, at a multiple of 24.5 a year ago, according to data collected by Bloomberg.
In general, investors agree that the prospects for Indian shares, in particular in terms of foreign streams, will be determined by geopolitics. All Spring Global Investments is one of those who add exposure to sectors driven in their own country such as consumers and financial data, which are less vulnerable to the first agenda of Trump’s America.
Heding costs for Indian shares have also climbed this week for the first time in a month. A size of 30 days ahead of volatility at the National Stock Exchange or India Ltd. is closed above its 50-day advancing average Friday, which suggests that traders have braced for increased market volatility.
Gary Dugan, Chief Executive Officer of the Global CIO office, said he would shift portfolios to China and possibly to Latin -America as geopolitical tensions with the American spiral.
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Published on 27 September 2025
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