Indian stocks are experiencing significant selling pressure as foreign investors withdraw over $8 billion, which is the largest selloff since early 2020. This comes after a strong 11-month rally, with concerns about high valuations and slowing profit growth contributing to the decline.

Furthermore, the growing interest in Chinese equities has also affected investor sentiment towards Indian markets. To counter this foreign withdrawal, local funds are stepping in to support the market, and inflows from domestic sources are helping to stabilize stock prices.

However, Goldman Sachs recently downgraded Indian stocks, reflecting the increasing caution among analysts about the sustainability of the market's previous momentum. As the situation unfolds, the focus remains on how local investments will continue to impact the resilience of Indian equities in the face of external pressures.