India exposed to global risks, could be off investors radar: Nomura

New Delhi: The Indian stock market will remain vulnerable to global risks and the country could be off the investors' radar until the health of corporate earnings growth revives, says a Nomura report.

The Japanese financial services major, is "underweight" on India and said one of the biggest concerns for the Indian market is high valuations.

"We believe the market will be vulnerable, to the global risk sentiment and India could be off investors' radar for quite some time until there is greater conviction on the health of corporate earnings growth," Nomura said in a research note.

"We stay underweight on India for now," it added.

The global brokerage firm said that some of its biggest concerns on the Indian stock market include, high valuations, unrealistic earnings growth and high expectations for reforms.

Indian equity markets have seen extreme weakness due to various negative factors, including global economic slowdown fears, falling crude prices, worries related to Chinese economy and muted quarterly earnings.

"Investors gave a thumbs up to India's budget after it has shown commitment to fiscal discipline, while hoping that RBI could cut rates further. The Sensex staged a rebound from the lows but still ended the year-to-date quarter down by 5.6 percent," Nomura said.

According to the global brokerage firm, India's twin deficits will always be a source of vulnerability, unless a broad-based consolidation strategy can be implemented to bring about higher quality growth to warrant the deficits.

On grown the report said the country is unlikely to return to the high growth era.

Moreover, private investments have been weak and are unlikely to pick up anytime soon, now that banks are facing asset quality concerns and reforms have stalled.

According to market experts domestic woes, including ballooning NPAs reported by banks, weak quarterly numbers in various other sectors also added to the market weakness recently.

Meanwhile, the index slumped to its lowest level in 21 months, when the Sensex crashed 807 points to drop below the 23,000-mark on February 11, this year.