The Indian stock market is making history — unfortunately, for the wrong reasons. The Nifty-50 index has fallen for five consecutive months, its longest losing run in 29 years.

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While benchmark indices ended little changed despite turbulent activity on Thursday, the market breadth or the advance-to-decline ratio hit a five-year low. This further indicates that the uncertainty is far from over, with small and mid-cap stocks falling the most.

Investors have been selling off their holdings nonstop due to rising economic uncertainty, dismal company profits, and ongoing overseas outflows. The Nifty and the Sensex have fallen over 4 per cent in February alone, bringing their losses to 14 percent and 13.2 per cent, respectively, since their record highs in September.

Valuation worries persist despite deep selloff

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Investors who rejoiced at record highs four months ago are now dealing with losses. Experts warn that stock values are still high despite the steep decline. Views from fund managers and analysts are divided.

Shankar Sharma, founder of Gquant and first global, predicts Indian markets to go through a rough time over the next five years. Analysts at Kotak institutional equities remain cautious and said the markets do not appear to be hitting a bottom any time soon.

Investors are preparing for what may be an extended period of declines. This comes amid widespread market volatility and India’s most difficult market phase in recent memory. Donald trump's tariffs threat has darkened the clouds for global markets. But not everyone is pessimistic. Citigroup takes a contrasting approach by raising its rating on Indian stocks from neutral to overweight.

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The Nifty index has positive seasonality in march. According to JM financial, in march, the index closed in the green in seven years of the last decade. Over the last 30 years, there have been a total of just eight major corrections. The latest 20 percent fall from their all-time highs is hardly the worst drop in those three decades.

Although increased volatility is sometimes associated with selloffs, this time appears different. The Nifty has lost almost 1.5 per cent of its value, but the India Vix has declined for six consecutive sessions. This suggests that traders are not going into a frenzy to purchase hedging strategies because they anticipate a possible rebound. Stock bulls are hoping for better news next month after February’s wild ride. 

(With the inputs from the agencies)