Sensex index has recovered this week and gained over 2 per cent.

Indian stocks will rise over the coming year, but are unlikely to recoup their recent losses, according to equity strategists in a Reuters poll who cited worries about the ongoing economic slowdown and weak corporate earnings.

While the benchmark BSE Sensex is up more than 4 per cent so far this year it has tumbled over 10 per cent to its lowest point in 2019 from a lifetime high hit early in June after a landslide election victory for the ruling party.

The index has recovered this week and gained over 2 per cent, largely driven by the government's decision to withdraw a tax surcharge on international investors and speed up a $10 billion capital infusion into state-run banks, which are grappling with a liquidity crunch.

Still, strategists expect those measures to have limited impact in the long run, with the index expected to remain below the June's record high until at least 2021.

The poll of over 50 strategists taken over the past week showed the Sensex index will gain 2 per cent to 38,400 by end-2019 from Tuesday's close of 37,641.27.

It is then expected to rise to 39,800 by end-June 2020 and remain around that level to end-2020, a downgrade from predictions made three months ago.

"Reforms announced by the finance minister will only have a knee-jerk reaction. But in the long run, stocks will remain vulnerable to weak corporate earnings and a further slowdown in economic growth," said RK Gupta, managing director at Taurus Mutual Fund.

"Rising risks of a global economic slowdown due to an escalating US-China trade war, which is not expected to fade anytime soon, is also one of the main risks to equities."

Since the July 5 union budget announcement, international investors have turned net sellers of Indian assets after being net buyers until then from February, according to the Foreign Portfolio Investors' (FPI) data.

Meanwhile, Indian firms have reported their most disappointing quarterly earnings figures in at least three years in the April-June quarter - due to slower growth in demand and an ongoing liquidity crunch.

Adding to worries, Asia's third-largest economy is expected to have slowed further to a five-year low in the previous quarter, driven by weak investment growth and sluggish demand, according to economists in a separate Reuters poll.

That suggests aggressive rate cuts to the tune of 110 basis points by the Reserve Bank of India have had little impact so far on the real economy, which along with muted inflation have raised expectations of further policy easing over the coming year.

In the latest poll, over half of 42 respondents who answered an additional question said Indian stocks would likely rise between 1-10 per cent over the coming six months, while 2 respondents said they would jump over 10 per cent.

"The government's announcements will have a significant impact on sentiment of both the domestic and international investors and is likely to arrest the fall in equity," noted Vinay Khattar, head of research at Edelweiss.

"That, coupled with a fall in oil prices, should lead to a significant bounceback in the coming days."

But over a third of those same respondents said Indian shares were more likely to fall in the next six months and the remaining expected stocks to at best stay the course.

"A further slowdown in global growth and broadening of trade related disputes over the coming months is likely to have downside implications for Indian stock markets, as investors will prefer safe havens," said Sher Mehta, director of macroeconomic research and econometrics at Virtuoso Economics.

"We expect Indian stock markets to witness a correction over the next six months."