Home and away: Why Indian equities have struggled to perform this year

Impact of recent market correction

Investors in India's equity markets have had a rough ride this year, as stock prices have corrected sharply in conjunction with a weaker currency, writes David Cornell, chief investment officer of Ocean Dial Asset Management.

As at the end of September, the main index (BSE Sensex) had fallen 6.3% in US dollar terms, while mid caps had fallen by 25.4% over the same timeframe.  A combination of global and local factors have driven this correction. On the home front, investors have been taking profits ahead of the 2019 general election - particularly in mid caps, where prices have rallied hardest in recent years.  Foreign investors have also taken fright as the US Federal Reserve has continued to tighten interest rates, causing bond yields to rally. In fact, more than $3bn has fled the equity market year-to-d...