India stocks lag global markets in 2026: BofA data shows 9.1% decline in USD terms

Indian equities have emerged as one of the weaker-performing major equity markets in 2026, according to Bank of America’s latest The Flow Show report. The report’s cross-asset performance table shows India equities down 9.1% year-to-date in US dollar terms as of August 19, 2026.

The underperformance stands out when compared with gains across several major markets. US equities have risen 13.3%, while Japan equities have gained 18% and emerging-market equities have advanced 20.6% during the same period. UK and European equities have also delivered positive returns, gaining 12.4% and 12.2%, respectively.

India’s performance also compares poorly with several Asian markets. Japan is up 18%, while Korea and Taiwan have been among the strongest individual equity markets, with gains of 77.6% and 58%, respectively, in the table cited by BofA. China, however, has also remained weak, with Chinese equities down 8.1% in dollar terms.

The broader asset-class picture has been particularly striking. Oil has been the top-performing major asset, with Brent crude up 50.6% and WTI crude up 49.5%, while the broader commodities basket has gained 63.4%. Industrial metals have risen 13.8%, whereas gold has gained a more modest 3.4%.

MUST READ: Sensex CAS manipulation: Thin liquidity exposes vulnerability; what's ahead?

ALSO READ: NSE plans to allow trading its shares on own platform: Report

MUST READ: India becomes Asia's least-preferred market, replaces Indonesia: BofA poll

BofA’s data also shows that the weakness in Indian equities has been accompanied by continued investor flows away from emerging-market equities. Global equity flows stood at $40.1 billion for the latest week, but emerging markets recorded $0.4 billion of outflows. On a year-to-date basis, India recorded equity outflows of $10.5 billion, compared with strong inflows into the US and Japan.

The divergence is also visible in capital flows. BofA’s data shows that India recorded $10.5 billion of equity outflows year-to-date, while the US attracted $433.6 billion and Japan $21.6 billion. Emerging-market equities as a group saw $45.3 billion of YTD outflows. The latest week also saw $0.4 billion leave EM equities, even as global equity inflows remained strong. This suggests that India’s weak dollar-denominated performance is not simply a function of global risk aversion; investor allocation has also been tilted towards developed markets and select other emerging-market opportunities.

The figures underline a sharp divergence in global equity performance in 2026, with India trailing several major markets even as overall global appetite for equities remains strong.