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Nifty, Sensex lag Asia on Rupee fall and valuation woes as investors look past GST cheer

Persistent foreign portfolio outflows, potential impact of US tariffs and stretched valuations are being cited as some of the reasons behind Indian stock markets' underperformance.

September 05, 2025 / 15:57 IST
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Indian stocks markets lagging behind Asian peers

Indian equities are underperforming Asian peers, which ended higher after US President Trump formalised a sharply lower automotive impot tariff on Japan, with Nifty and Sensex lower by nearly half a percent on September 5 as investors looked past the recent GST reform cheer and hopes of a rate cut by the Federal Reserve.

Sensex dropped nearly 0.42 percent while Nifty 50 fell 0.38 percent to trade below 24,650-mark, even as Japan's Nikkei gained nearly a percent and Hong Kong's Hang Seng ended more than 1.4 percent higher.

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Equity analysts have cited several factors to explain the Indian stock markets' weakness despite strong domestic and global cues.

Foreign Outflows