Lyn Alden Turns More Positive on India After Valuation Reset

Lyn Alden, Founder of Lyn Alden Investment Strategy, has turned more optimistic on Indian equities for 2026, citing improved valuations and strengthening fundamentals after a period of market underperformance. The investment strategist's shift in perspective comes as Indian markets have experienced a notable valuation reset.

Increased Bullishness on Indian Markets

Alden expressed her enhanced confidence in Indian equities, stating she is "more bullish on Indian equities than I was last year." The strategist attributed this shift primarily to more favorable valuations in the market. She noted that while underlying fundamentals are improving, this development raises the probability of stronger performance in 2026.

Despite her optimism, Alden advised traders to exercise caution and wait for confirmation of a market bottom before positioning aggressively in Indian equities.

Regional Investment Perspective

While Alden reiterated her long-standing bullish view on Latin America, which has already demonstrated outperformance, she indicated a strategic shift in her regional focus. Her relative optimism has increased more sharply for India in the year ahead, driven primarily by the valuation reset in Indian markets compared to her continued but steady positive outlook on Latin American markets.

Global Macro Outlook

Regarding broader market dynamics, Alden discussed the potential impact of escalating US-Europe trade tensions on global markets. She suggested that markets are likely to look through short-term volatility, expecting eventual de-escalation. The strategist observed that historically, "whenever there were very big tariff escalations, there tended to be immediate term reactions, but then the market generally tried to see through it and assumed that there's going to be some sort of de-escalation."

Federal Reserve and Political Tensions

Alden highlighted growing friction between the US Federal Reserve and the executive branch, describing it as the most serious conflict since the 1951 Treasury-Fed Accord. With Fed Chair Jerome Powell expected to appear in court on related matters, the conflict has taken on a more formal character. Despite repeated calls for lower interest rates from Trump, Alden's base case remains that Powell will complete his term as chairman, pointing to recent de-escalation from the White House and suggesting key figures are not in favor of major confrontation.

The investment strategist concluded that the Fed's balance sheet is likely to continue its gradual expansion regardless of political developments, though questions over central bank independence remain a long-term consideration for market participants.