Market veterans remain bullish on India's investment prospects despite rising global geopolitical risks under the Trump presidency, emphasizing that the country's structural growth story remains intact amid near-term volatility. The optimistic outlook emerged during discussions at the CFA Society India Investment Conference held in Mumbai on January 9.

Strong Macro Fundamentals Drive Confidence

Carenlian Asset Managers' Vikas Khemani expressed confidence that 2026 will outperform 2025, characterizing the past year as a consolidation phase rather than a fundamental breakdown. He drew parallels with previous periods of uncertainty, noting that pessimism typically peaks just before market conditions stabilize.

"In the last 12 months, while all these things were happening, we had a great fiscal stimulus, a great monetary stimulus, liquidity infusion, interest-rate actions and growth-boosting policies," Khemani explained. He highlighted that both government and private capex have shown strong performance, with all growth pillars remaining firmly in place.

Valuation Challenges Persist Despite Strong Returns

HDFC AMC's Chirag Setalvad acknowledged that while long-term returns remain robust, current valuations continue to present challenges for investors. He provided specific performance metrics demonstrating the market's strength over extended periods.

"We've just had a one-year or one-and-a-half-year consolidation," Setalvad noted, emphasizing that corrections are necessary to normalize premium valuations. He observed a constructive shift in market sentiment, with retail investors becoming more cautious and IPO activity slowing down.

Global Environment Remains Challenging

Regarding global growth prospects, Setalvad expressed caution about the broader international landscape. He noted that the United States is unlikely to sustain 2.50-2.70% growth rates, while China faces structural challenges and Europe remains in economic doldrums.

WhiteOak Capital's Prashant Khemka maintained stable expectations for Indian equities, stating that fair coin flip expectations of 10.00-12.00% returns remain unchanged for 2026. He defended India's valuation premium, arguing that the country deserves higher multiples due to its democratic framework and stronger property rights.

India's Structural Advantages Justify Premium

Khemka provided important context regarding India's valuation relative to global markets, particularly the United States. "India today is trading at a higher discount to the US than it has over the last 25 years, barring global crises," he explained, countering concerns about excessive valuations.

Regarding Trump's broader impact on global markets, Khemka characterized the shift as ideological rather than temporary, suggesting that Trump-like policies have become more entrenched in global political discourse.

Market Volatility Viewed as Opportunity

Despite acknowledging the increased difficulty in forecasting markets under Trump's leadership, panelists emphasized that volatility should be welcomed rather than feared. Setalvad concluded that market corrections create wealth-building opportunities for long-term investors.

The experts' consensus reflects confidence in India's fundamental economic strength, even as global uncertainties continue to create short-term market challenges. Their outlook suggests that India's structural advantages and policy support will continue driving long-term growth despite external headwinds.

Indian equity markets concluded the week with substantial losses, breaking a two-week winning streak and posting their most significant weekly decline in four months. The broad-based selling pressure resulted in BSE-listed companies losing market capitalisation worth over ₹15 lakh crore during the week.

Weekly Performance Overview

The benchmark indices faced considerable headwinds throughout the week, with selling pressure intensifying across sectors. The Nifty index declined nearly 2.5% for the week, while all sectoral indices concluded in negative territory, with some sectors witnessing declines as steep as 6.00%.

The Nifty Bank index demonstrated relative outperformance compared to other sectors but still registered a decline of 1.5%. The midcap index mirrored the benchmark's performance, shedding over 2.5% during the week.

Friday's Market Action

Markets remained under pressure on Friday, extending losses for the fourth consecutive session. The Sensex fell 605.00 points to close at 83,576.00, while the Nifty dropped 194.00 points to settle at 25,683.00, slipping below the psychologically important 25,700 mark.

Market breadth remained firmly negative throughout the session, with the advance-decline ratio standing at 1:4. Over 20 Nifty constituents declined more than 1.00%, while six stocks registered losses exceeding 2.00%.

Sectoral Performance and Stock Movements

Among the major laggards for the week, 35 Nifty stocks concluded with losses. The top weekly underperformers included:

• Adani Enterprises
• NTPC
• Adani Ports
• ICICI Bank

In the midcap segment, several stocks faced significant selling pressure:

• Premier Energies
• Waaree
• Inox Wind
• NBCC
• Jindal Stainless
• HPCL

Realty stocks emerged as the worst performers on Friday amid continued foreign investor selling, with Godrej Properties leading the sector's decline. Capital market stocks also remained under pressure, with 360 ONE falling over 4.00%.

Notable Stock Movements

Despite the broader market weakness, certain sectors and stocks provided some relief. Metal stocks bucked the negative trend, with Nalco and Hindustan Zinc posting gains. Higher crude oil prices supported upstream oil companies, lifting ONGC and Oil India by 1.00-2.00%.

Several individual stocks witnessed significant movements due to specific developments:

Vodafone Idea and Indus Towers concluded off their day's highs despite experiencing some relief regarding AGR dues developments.

The week's performance reflects broad-based selling pressure across Indian equity markets, with investors remaining cautious amid various sectoral and stock-specific concerns. The significant market capitalisation erosion and widespread sectoral declines highlight the challenging environment faced by market participants during this period.