Foreign investors are increasingly bearish on Indian equities, reaching the most pessimistic sentiment in two years. This shift is driven by a combination of factors: a depreciating rupee, newly imposed U.S. tariffs, overvalued stock prices, and weakening corporate profit growth all of which have dampened India's equity appeal.

The Indian rupee has slipped to fresh lows, pressured by tariff-driven capital outflows and renewed investor caution. To counteract this, the Reserve Bank of India (RBI) has intervened in currency markets, though challenges persist amid ongoing trade frictions. Domestic markets remain on edge, marked by a sixth consecutive week of losses, with indices like Nifty struggling to reclaim key resistance levels between 24,600 and 24,800. Analysts caution that unless the market surpasses that zone decisively, pessimism may continue.

Amid these headwinds, investor confidence is subdued, leaving India's stock market at a crossroads grappling with external shocks yet underpinned by long-term fundamentals that may eventually attract renewed interest.