Know why Nifty is down 8% from Sept 2024 high but global markets rallied up to 150%

While global equity markets are rallying to their fresh highs, the domestic benchmarks seem to be struggling. According to the latest India strategy note by Motilal Oswal Financial Services Ltd (MOFSL), the Nifty has declined 8% from its September 2024 peak, while global markets have rallied 30-150% since India’s market high.

While most major global indices have confidently brushed off recent geopolitical anxieties to reclaim or cross their all-time highs following the March 2026 sell-off, the Nifty has remained sluggish, trading roughly 5% below its pre-war levels, it said 

Earnings expectations

MOFSL pointed out that global markets are pricing in 20% to 40% earnings per share (EPS) growth. India, by comparison, is trailing with an EPS growth of only about 18%, noting that “a sustainable earnings growth delivery is critical for reversing the underperformance.”   

AI Factor

The brokerage also noted that the narrow, concentrated nature of the global AI rally has favored tech-heavy markets like South Korea, Taiwan, and the United States, leaving India on the sidelines. 

“India’s lower exposure to AI hardware and the narrow, concentrated nature of the global AI rally have limited participation, thereby overstating overall market weakness,” the brokerage said.

FII outflows

This global AI shift has also had a direct impact on foreign capital flows. “With AI trade having run for an extended period, any potential unwinding or rotation could redirect FII flows toward structurally strong domestic growth markets like India, setting the stage for a reversal in relative underperformance,” MOFLS said

Foreign Institutional Investors (FIIs) have been pulling their money out of Indian equities, logging massive net outflows of approximately $21 billion so far in CY 2026, it noted. Domestic Institutional Investors (DIIs) have stepped up, pumping in roughly $33 billion.  

However, MOFSL noted the global AI trade has been running hot for a long time, and any cool-down could be India’s gain. “With AI trade having run for an extended period, any potential unwinding or rotation could redirect FII flows toward structurally strong domestic
growth markets like India, setting the stage for a reversal in relative underperformance,” it said.