Indian stocks are under pressure due to a significant foreign selloff, with over $8 billion withdrawn this month. This decline comes after a record 11-month rally, as high valuations, slowing profit growth, and increased interest in Chinese equities have contributed to the downturn.

Despite these challenges, the MSCI India Index has only dropped about 6% in October, outperforming a broader Asian equities gauge, which is down nearly 4%. The resilience of Indian stocks can be attributed to strong domestic inflows, with local mutual funds, banks, and insurance firms investing over $10 billion into the market this month. This surge has pushed total inflows for the year to over $50 billion, potentially setting a new annual record.

Major financial institutions, including Goldman Sachs Group Inc., have recently downgraded their outlook on Indian equities, reflecting growing skepticism in the market.