Indices: Is the Indian market overvalued?

India’s flagship stock market index, the Nifty 50, went on an eight-session losing streak, before ending February 17 with a small gain of 0.3%. The Nifty 50 has lost 3% since the beginning of the year. Is the Indian index coming to the end of a bullish cycle?

This sustained decline in the Indian stock market comes on the heels of the United States’ announcement of possible new tariffs. President Donald Trump has announced his intention to introduce reciprocal tariffs against nations that impose taxes on products imported from the USA. According to analysts, these proposed tariffs could deter foreign investors from placing their capital in India, accentuating the risk of a slowdown in international investment flows to the country.

As a reminder, the Nifty 50 closed 2024 up 8.8%, marking its ninth consecutive year of growth. Against a backdrop of post-pandemic recovery and sustained economic reforms, India’s large caps have attracted strong investor interest in recent years.