CLSA has highlighted a rare valuation window for Indian equities, noting that India has sat out one of the broadest global bull markets in nearly two decades, even as the Nifty’s long-term record remains among the strongest worldwide.
In a fresh “Bits & Pieces” note, the brokerage pointed out that the Nifty has delivered a 2,913% gain in local currency terms since CLSA’s first India forum in 1998 — translating into a total return of 4,276%. In dollar terms, the 1,341% rise still outpaces South Korea’s Kospi, Taiwan’s TWSE and Australia’s ASX 200, all of which returned between 137% and 747% over the same period.
CLSA noted that India, described two decades ago as an “ignored tiger cub”, has since transformed into a $5.3-trillion equity market. Its own universe of 179 covered Indian stocks alone is now worth $3.1 trillion.
India Misses a Global Bull Run
Despite India’s long-term outperformance, 2025 has been a rare year of underachievement. Nearly 65% of major global equity benchmarks have hit record highs this year — the broadest bull-market participation since 2007. India, by contrast, remains one of the few large markets yet to log a new high in 2025.
This stands out because the Nifty has made new lifetime highs in 19 of the past 25 years, the most consistent record among major global indices. The current 13-month stretch without a fresh high is now the sixth longest in three decades.
CLSA attributes this phase to geopolitical noise, uncertainty around trade agreements, and cautious global sentiment.
Valuations Now More Comfortable
After a 12-month stretch of relative underperformance, India’s valuation premium has compressed sharply:
Well below long-term average vs China
Near three-year lows vs broader emerging markets
This reset, alongside subdued sentiment, is what CLSA believes creates a “relatively better entry point” for long-term investors.
The brokerage, however, cautioned that high absolute valuations, a crowded IPO pipeline and the lack of large-scale AI winners within the listed universe could cap near-term rerating potential.
What CLSA Expects Next
The note highlighted three potential catalysts that could refocus global attention on India:
A breakthrough in India–US or India–EU trade deals
A positive surprise in GDP data
Stronger-than-expected earnings delivery
With fiscal room tight, CLSA expects monetary policy to stay supportive. It prefers rate-sensitive stocks, trade-linked sectors and consumption plays. IT services — long out of favour — is its contrarian pick, helped by improving US-India diplomatic sentiment.
Market Snapshot: Weak Global Cues Drag Benchmark Indices
Indian equities closed lower on Friday amid soft global signals and unease around US macro data.
The Sensex slipped 400 points to 85,232, while the Nifty 50 fell 124 points to 26,068. A pullback in US tech stocks and uncertain rate expectations kept foreign inflows muted, analysts said.
Puneet Singhania of Master Trust noted that while domestic fundamentals remain firm, global currency moves and rate risks are preventing FIIs from meaningfully increasing exposure.
Monday’s Trade Setup
Technical indicators point to further near-term weakness:
A bearish Harami pattern formed on the Nifty’s hourly chart.
The index has slipped below the 21-hour EMA.
The hourly RSI continues to trend lower.
Rupak De of LKP Securities sees support in the 25,920–25,900 zone. Resistance is placed at 26,166, and a break above that level could reverse sentiment.
