Hopes that the reelection of the Narendra Modi government would lift markets have failed to materialise on global and local concerns.
The country's GDP growth fell to over a 6-year low of 5 percent in the June quarter, equity benchmarks Nifty and Sensex have plunged 7.10 percent and 5.81 percent, respectively, since May 24.
On the domestic front, the budget proposal of tax surcharge on super-rich, a slump in auto sales and the liquidity crunch in the financial market triggered a fresh wave of outflow of foreign fund from the equity market.
The poor health of banks and NBFCs, disappointing quarterly earnings of the India Inc and an almost stagnant agri sector made the situation worse.
The US-China trade war, the chaos around Brexit and geopolitical tension were the top global headwinds. Globally, the US-China trade war has added to worries of a looming recession.
However, 12 stocks, including HDFC Asset Management Company, Zydus Wellness, HDFC Life Insurance, Adani Power and Apollo Hospitals Enterprise, defied the trend in the market, surging up to 50 percent.
However, during the same period, many stocks have also seen sharp declines.
Foreign portfolio investors (FPIs) took off nearly Rs 29,000 crore from the Indian equity market during July and August 2019.
Data from Ace Equity shows that barring the IT sector, which rose about 7 percent, all sectoral indices experienced the heat of selloff.
The government has taken a slew of measures of late to prop up the economy and reverse the trend in the market. The rollback of tax surcharge, change in FDI norms, infusing liquidity into the banks and the rate cuts by the Reserve Bank of India are the measures that are seen as positives for the market.
However, concerns over the health of the economy are mounting at this juncture and the expectations of fresh monetary and regulatory measures to boost the economy have grown stronger.
Experts believe reforms should be calibrated with the problem and not pursued in a drastic manner and concerns of specific sectors need to be addressed based on feasibility.The government has said it will take more steps to revive confidence in the market. Union Finance Minister Nirmala Sitharaman on September 6 said the government will respond to the challenges faced by all the sectors.