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India's 2025 Stock Market Sees Worst Asia Performance Since 1995: Jefferies

India's equity market recorded its weakest relative performance in Asia since 1995 during 2025, heavily impacting regional portfolios with high India exposure. The Jefferies Asia ex-Japan portfolio underperformed its benchmark as Indian holdings fell 2.4% in USD terms, contrasting with a 23% rise in Chinese stocks. Despite this annual setback and a reduction in portfolio weight, India remains the brokerage's largest regional allocation. Jefferies emphasizes that India is still a long-term outperformer, with a dedicated portfolio up 81.9% since inception, far ahead of key indices.

Key Points: India's 2025 Equity Market Worst in Asia Since 1995

  • Worst relative Asia performance since 1995
  • Portfolio India exposure fell from 50% to 36%
  • Indian stocks fell 2.4% in USD terms
  • Long-term portfolio still up 81.9% since inception
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India equities see weakest relative Asia performance since 1995: yet remain long-term outperformer: Jefferies

Jefferies report reveals India's weakest relative Asian stock performance since 1995 in 2025, though long-term outlook remains strong.

"The portfolio's Indian stocks declined by an average of 2.4% in US dollar terms last year, while the portfolio's Chinese stocks rose by an average of 23% - Jefferies GREED & fear report"

New Delhi, January 5

India's equity market recorded its worst relative performance in an Asian context since 1995 in 2025, weighing heavily on regional portfolios with high India exposure, according to the latest GREED & fear report by global brokerage Jefferies.

The Jefferies Asia ex-Japan long-only portfolio, which historically maintained a significant overweight position in India, underperformed its benchmark last year primarily due to weak Indian equity returns. Indian stocks in the portfolio declined by an average 2.4 per cent in US dollar terms in 2025, even as Chinese stocks in the same portfolio rose by an average 23 per cent.

"The portfolio's Indian stocks declined by an average of 2.4% in US dollar terms last year, while the portfolio's Chinese stocks rose by an average of 23%," noted the report.

The report noted that India accounted for 36 per cent of the Asia ex-Japan portfolio at the end of 2025, down from a peak exposure of 50 per cent in February 2024. Despite this reduction, India remained the single largest contributor to relative underperformance during the year.

Jefferies highlighted that the underperformance was notable given India's long-standing leadership within Asia over the past decade. The brokerage described 2025 as a clear break from that trend, marking India's weakest relative showing versus regional peers in nearly three decades.

The India-focused long-only equity portfolio launched by Jefferies in July 2021 also lagged its benchmark. The portfolio rose marginally by 0.2 per cent in US dollar terms in the most recent quarter but underperformed the MSCI India Index, which gained 4.8 per cent over the same period. For the full year, the portfolio declined 2.7 per cent, compared with a 4.3 per cent rise in the benchmark.

However, Jefferies emphasised that India remains a long-term outperformer. Since inception, the India long-only portfolio has delivered an 81.9 per cent total return in US dollar terms, significantly ahead of the MSCI India Index's 48.7 per cent gain and the Nifty's 45.7 per cent rise.

The report added that India's weaker performance contrasted with stronger outcomes in other emerging markets and China in particular, underscoring a rotation in regional leadership rather than a structural deterioration in India's long-term equity story.

- ANI

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Reader Comments

P
Priya S
It's concerning to see such a sharp underperformance, especially when Chinese stocks are rallying. Maybe our valuations got too frothy? Time for some sober reflection in Dalal Street.
R
Rohit P
Jefferies portfolio underperforming its own benchmark is the real story here. Are their stock picks the problem, not the Indian market itself? The MSCI India still gained 4.8% in that quarter they mentioned.
S
Sarah B
As a long-term investor in Indian ETFs from the US, I'm not worried. Every market has its cycles. The reduction from 50% to 36% exposure seems like a prudent rebalancing by Jefferies, not a loss of faith.
K
Karthik V
This is a healthy reality check. We've been celebrating the India story for years, but competition exists. China's rebound shows money flows where there's value. Maybe some FIIs are taking profits here and moving there temporarily. Chalta hai.
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Michael C
The headline is dramatic, but the key is in the last paragraph. It's a "rotation in regional leadership" not a structural issue. For global portfolios, diversification across Asia makes sense. India remains a core, long-term holding.
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Nisha Z
Respect

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