Correction FINALLY OVER in Indian Markets? (time to buy?)

0:05 Hi guys, what's up? So the Indian markets have been doing really badly and SIP investors are panicking a little bit. FIIS have withdrawn record amount of money this year in the year 2026. A lot of negative news for the economy. For example, Subashand right ex finance secretary, right? He spoke that maybe we are fudging data what not. So a lot of negativity has happened on the Indian markets and possibly because of that the Indian market is going down and it is creating mass panic. So natural question comes that hey if I have already invested a lot of money on the Indian stocks what should I do? Should I book losses go away or should I double down and invest more money. So that's one part of the equation. Second part of the equation that if you have invested in the US markets for example I have been a big proponent of investing globally and my entire community followed around.

0:53 They made good money on US stocks. So you might be sitting on good profits on the US market. Now it is hitting all-time high. So should you cut your stocks in the US, bring that money and invest in undervalued Indian stocks. That's a very natural way of thinking. So on this video we are going to cover the macros. You will have a very clear understanding that how you should deploy your capital going forward and we will speak about the entire topic in five six simple points. So that even if you are a beginner in the stock market, it will give you a lot of clarity. Should you invest new money? what should you do with your old money? Stop your SIPs, invest more in the US. So you'll get that complete clarity. Okay. So okay, so here is chart number one, right? And this is your comparison between QQQ, this blue line that you see, this is the US stock index and this candlestick, Japanese candlestick pattern, this this entire thing is the Indian stock index or Nifty50. Okay. Now here if you look at the last five years, so we have started compare comparing the data from 2020 onwards. If you look at the last 5 years, the outperformance of QQQ has been insane. Okay, compared to Nifty 15, basically you made almost double the returns in QQQ compared to Nifty50. This is insane how to performance of the US market. It will possibly take maybe more than a decade for this to get abridged.

2:09 So important lesson here is that we should all globally diversify, right? This is an important point going forward. because whenever bad cycles happens on Indian stocks it gets brutal. Okay. so yeah so this has been the theme for the last five years unfortunately right I'm just showing you the data right whatever the real facts are this also does not account for INR depreciation which is a very important point this is one of the reasons why fi have been pulling money out of Indian market. So if you aggregate all this it would suffice to say that the outperformance of US stocks. So US stocks have done brilliantly okay compared to Indian stocks. Okay. So natural question comes that you know what okay maybe US stocks are overvalued right overvalued and Indian stocks are undervalued. So what we should do is that we should cut our positions on US stocks cut here and whatever money we get maybe we can rotate it to Indian stocks. Right? So we will cover this.

3:02 Right? But I hope that at least in terms of performance you are able to grasp that US stocks have really outperformed or outshined Indian stocks by a lot. This is not even a comparison anymore here. Okay. So then comes question number two that hey how much more will Nifty50 correct? Can it correct more by 10%, well it really depends on a lot of things. So let me help you understand the macros. Okay. So see here is the chart for Nifty50 and you will see that from 2024 right till 2026 and 2026 is about to be over. So roughly 2.5 years we have given 0% returns plus our currency has at least diminished by 15%.

3:39 So in the last 2.5 years we have gotten minus 15% in real terms. This is severe underperformance. Okay. And natural response you know what okay you know what this is just going to revert. Okay. So this is a concept of mean reversion. Mean reversion means that hey because it has done so badly for the last 2 and a half years right I mean it will at least give some returns right going forward. So that's a very optimistic way of thinking but that is not a macro way of thinking. So let me help you understand the macro way of thinking here. Okay. So very simple point that hey for the last 2 and a half years right if we look at this entire chart what you would notice that okay there was like you know a lot of volatility it went up down up down so on and so forth. Why was this volatility created? So this volatility got created due to two reasons two fundamental reasons. The number one was the AI trade that in the US the AI trade was picking up. Companies like Nvidia were pouring in a lot of money. A lot of peripheral AI companies which were creating the AI infrastructure they started going up. For example, Micron was ready company but it possibly gave the best return in the in this year.

4:46 Okay. So this has this has been the year of Micron. Okay. So it did very well. AMD did very well and bunch of other like you know AI stocks did very well. Okay. So now India had zero participation in the AI trade right now in 2026 has this changed that is India suddenly participating more on AI? No not really. AI trade is still going on and we have zero participation here. This was one of the reasons why the Indian market underperformed over the last 2 and a half years because for the last 2 and a half three years AI trade has been the talk of the town. Everyone is gravitating towards AI trade. By the way, I run a global investing community.

5:22 In case you want fundamental driven knowledge, business-driven knowledge, I present everything in a concise, precise format. I put my own money on the line and perform. You can check my portfolio performance. Every single trade is logged and you get timely information. I also do classes around it. So, you can check out the links in description comment box in case you think it is useful, right? So, okay. So, this was the first key reason why the Indian market did badly. This hasn't changed in 2026. Right? This is the important point. The second key point is the oil.

5:51 Okay. And oil is nothing but energy risk. Now, India is a net importer of oil. And let me just quickly show you the oil prices. What's happening on the oil prices front? So, you'll see that in 2026 the oil price dramatically went up, right? And since then it has consolidated. Okay, it is just trying to consolidate, find a new base. So, right now when it comes to AI or it comes to oil, things haven't stabilized for India. Okay. Okay. So from a macro point of view, can we fall more? The answer is absolutely yes. Okay. This is a very likely scenario. Right. Even from a technical point of view, right? Now this this pattern is called as head and shoulder pattern. Okay. So we can fall somewhere around here. This is around 21 400k. Okay. So this is a likely scenario that could happen. So technically and macro wise both the things unfortunately are lining up for the market to fall more. Okay. So should you invest more money right now? The answer would be an absolute no. Okay, you should not. Now I can be wrong, right? I mean any estimate can go wrong, right? U but having said this, there are at least macro or technical basis to it. Now anyone's prediction can go wrong, right? But I'm helping you understand the fun behind it. Now what about the old money? For example, you started investing here.

7:02 Should you stop your SIP this that stuff? No. Okay. See, when you started your SIP, you did it with the viewpoint, you know what? Okay, right. I mean, it's a long-term view this that stuff. Now it's time to show conviction on whatever investment theme you had picked. Now in case you are unbalanced for example 100% of your money is in Indian stocks and you feel Very quick summary so far. Technical we are weak. Macro wise we are weak. When will we find the bottom? When there is some stability around the AI trade right or AI trade bursts, right? In the US maybe in the next 3 months it will burst. Who knows? No one can say in case that happens India will benefit a lot.

7:49 Okay. But right now AI trade is not bursting. Okay. It is very much intact and I'll show you some data points also there. Number two point oil is not finding a base. But the second point that oil not finding a base this is likely to get sorted hopefully over the next few months. There is additional point. See guys basically what is happening is that if you study geopolitics winters are coming okay in Europe right and Russia is unlikely to supply energy to Europe. Okay which means that energy prices are going to go up and oil prices are also going to put an upward pressure. Okay. So that's a likely scenario. Now I don't know if that will play out or not but I'm just letting you know. Okay. So all these macros combined, right? it doesn't look very positive right now. this does not however mean that you pull out your old money. Okay, whatever old money you have, there is no point in panic selling. Okay, this is an important point. Now why not panic sell? See stocks or markets for example Nifty50 hello? Yeah, HL would HDFC Bank they move for three reasons. One is called as fundamentals. Second is called as macro.

8:51 Third is called as sentiment. Okay, sentiment is very important and very easy to predict. Right now, everyone is bearish on the Indian market. It's fine that you're not putting new money onto the Indian market completely. Okay, but pulling out old money that does not make sense unless you want to do portfolio rebalancing. I hope that this second point is clear. Now comes the third point that a you are a very negative person. You're saying that Indian market will fall. Why will it fall more? It has already fallen so much. So, okay. So, let us look at some concrete data. Okay.

9:19 Now here is the concrete data and this is the FII selling data right and you can check it you can go to any chart GPD tool and all that and you can type out that you know what what is the total holding of FIS and how much they are selling each year as a percentage of their portfolio. So you will start noticing some important things. Okay. So in 2020 FIS bought the Indian market. Okay. And in 2023 they again bought the Indian market. In 2026 they have been net sellers in the Indian market and they have sold the highest amount of equity right a percentage of their existing holding by 3.1%. Okay, net net they are negative. Okay, so they haven't really bought Indian equities since 2020. They haven't increased their allocation right in Indian equities. Now this is important. See what is happening is that right now FIS have roughly 78.7 lakh cr. Okay, this is huge amount of money. Just for context, we get 30,000 cr of SIP monthly inflows. Okay. So this 78.7 lakh cr is a lot of money or lot of existing money of FI/ FBI in the Indian markets right now and their portfolio is like this big. Okay. They have sold little bit. Now can they afford to sell more over the next four five years? The answer is 100% yes. Okay. They can actually continue selling like 3% every year for the next 5 years. Right? Then also it will only be like 15% of their aggregate portfolio that they have sold.

10:42 Okay. So there is enough room left for fiis to sell. So natural point comes that hey will fiis undertake more selling. Now what do fi or what does fi decisions is contingent on or what does it depend on? Two things right? One is that it depends on the reward that they are making. Reward means that how much potential return they can make in the Indian markets. Now this indirectly means that at what rate our companies are growing and do we have any growth levers in the economy. Unfortunately, we don't. Okay, we don't have AI. We don't have an AI play. Now, you'll say manufacturing. Unfortunately, no, right?

11:17 A manufacturing in 2014, it was decided that it will become 25%. as a percentage of our GDP, right? Now, the share is still hovering around 15. Okay. So, nothing has happened in the last 10 year unfortunately. Okay. So, manufacturing again is not a growth industry as of now. Financials are there fine, hospitals are there in May, FIS have already built position. Okay. But general net net overall broad market they are still cutting positions and they have enough room to cut more positions. Okay. So it can fall right now good news is now you'll say you are a bearer of bad news okay that you're saying such bad bad things right we'll dislike this video right I'm just telling you honest take right hardly anyone tells you honest things and all that crap it's guys I mean in investing the most important thing is making money it's not about random storytelling see guys bottom line is that see now good news is that a important base has been formed okay we are still hovering around this 24,000. This was first base, first support. Okay, this was second support. This possibly is another support here. Okay, a strong support here. So there is like this base or this zone is already underway. Okay, so we might see like you know this type of a market where we consolidate in this range. Okay, so if you are looking to exit your equities or lighten your positions, then this is the time to exit right when we go in this zone. Okay, here somewhere here. Okay, that's when you lighten your position. My money is also there on Nifty50. I took a swing trade. Unfortunately, it did not work out. So, I'm holding it. I'm not doing anything. I will wait for better times to exit. So, long story short, what is the overarching view of the Indian market? See, number one, there is room to fall. Okay, room to fall. Okay, why?

12:54 Because FIS can still exit a lot of things. Okay, what do FIS care about? FII care about two things. One is growth. Unfortunately, growth is not there. Second, they look at risk profile. Okay, risk profile means that okay, do I need to go to an emerging market like India, right? because from a government bond perspective, we are tripleB negative. Okay, now just for context, right? Even Thai government bonds are rated higher than that of India's government bond. Okay, so there is risk in India's economy as per international assessment standards.

13:25 Okay, this is not me making up. Check it. Fact check everything. Whenever you hear a YouTuber or like you know anyone talking about finance, fact check them. Okay, so long story short, right? the risk is there on India's economy because we are an emerging market right and unless a commiserate reward is there is no sense for FIA to invest okay so right now from a macro point of view what is happening well a bunch of things are happening that you know US is pushing like manufacturing its own manufacturing Vietnam is moving ahead on a bunch of industries for example our textile industry used to be really strong but over time Vietnam has taken a lot of market share away from India when it comes to textile. So right structural growth can happen right unfortunately we are in that limbo phase okay risk is high right it's not going away so we are purely right now competing on valuations okay so that's the only thing and valuations may whenever we are competing on pure valuations you are likely to see like something like this right a zone formation okay so we might rotate like this right this is sideways movement of the market okay because f they will come and you know sell like 30% of their equity in like one go because right because remainder 70% of equity which is remaining in the market that will get devalued right so this is a problem for them so they are also going to exit slow so whenever you see them adding a little bit time exit okay so that then you make a call whether to exit or not okay so then comes the next point that okay what about US stock market because if we study the US stocks right and this is US stocks this looks insane okay so this is insane, right?

15:04 For example, if we would have invested with you in 2024, right? And please go and check my post, right? I mean, I did recommend investing in 2024, you would have made insane amount of money like 120 odd percent and all that stuff, right? In the US equities on a index. Okay, this is insane like one of the best performing phases for NASDAQ. Okay, now of course because it has run up so much, right? Natural response comes.

15:30 Okay. Now see guys 20% correction can happen anytime. Okay. This is not something which is in our control. But what we need to worry about is called as EPS or earning per share growth. Right. This is a very important point that people miss. Now let me help you understand it. See if you look at NASDAQ right? NASDAQ and if you look at something like Nifty50. Now EPS growth rate or the P of the market here is roughly around 21, right? And here the PE is 19. Now you'll say yeah 19 P means price to earnings is cheap and we should always buy cheap P. Now by that logic you should only buy real estate companies or oil companies or you know public sector banks only right but it's not as if that because you are buying something cheap it will give you returns what matters is the growth rate of this EPS fine it is at 19p okay but at what earning per share growth rate is it exhibiting and at what rate is that growing for example if Indian market right now is at 19p that exhibits valuation But can it grow at let's say 15p? Okay.

16:38 So let me make it simple. So you have two choices. Okay. Choice A and choice B. Choice A Indian market P is 19. Okay. And let's say it grows at 11% in dollar terms. Now choice B is that you go and buy something like NASDAQ which is at 2122 P but the growth rate is 15%. Kagger in dollar terms. Which one will you pick? Okay. So what people typically speak about is that they just talk about this week 19. No, it's not like that.

17:06 You have to see it in context of earning per share growth rate. Okay. Now, here is the data, right? And I have pulled up estimates. These are analyst estimate. These are not my estimates. And here they have built a base case, bare case and bull case of M7 or MAG 7. Mag 7 means top seven US companies because that kind of acts as a north star for the US market. Now here what you would notice is the base case itself is projecting a 14% kagger in dollar terms or close to 14% kagger in dollar terms and Indian EPS growth rate is not higher than this okay so therefore like fi are now making a choice if we are anyways getting 14% from the US market what's the point of going to the Indian market okay so this is the reason why they're not entering the Indian market okay bubble so in India that will be huge okay and therefore like I mean if you're an NR I you can possibly keep like 10% investments in India, 90% abroad or whatever and you will benefit on this diversification bet and India will do exceptionally well in case AI bubble burst. So then you should pray bubble should burst. Okay, in case you are a pure Indian market investor but see guys realistically AI bubble bursting is a big deal right now I am not betting on it right if I have to pick one way it looks very unlikely that AI bubble is going to burst. People keep on pointing 1999 maybe mobile.

18:30 See guys basically you have to look at the type of companies that were there in 1999 versus 2026. Now when we talk about AI bubble here what can happen on the AI bubble is that okay we expect that AI is going to add 200 units of productivity but it ends up adding only 100 units of productivity. So in that case what will happen is valuation correction. Okay. And we are likely to see a sideways market. So let me just project it on a graphical format. So in that situation in case the earnings slowdown happen, earning collapse will not happen. Okay.

19:03 So earning slowdown happen then we can expect like something like this. Okay. So what I was explaining right so we might witness something like this right in this range we might happen right and this is the possibility which we need to prepare for on the US market. So I hope that so far you got an idea okay if you are already stuck on the Indian market what is it that you should do? Hold it. Don't do anything. Wait for FIS to reenter then exit some of your stocks.

19:26 Should you be putting new money on the Indian market? Well, it depends, right? I mean, if you believe that AI will keep on compounding, then no, no point. Go to the US market, invest more money there and my community can really help. So, then natural question comes that you know what, okay, US market too high, Indian market too low, but I'm not convinced about Indian market because growth not there. US market has run up too much. no, I'll I'll wait. Okay.

19:49 So, what should I do? Meanwhile, I would say that you should do two things. Number one, buy some gold. Okay, it makes sense. It has corrected a bit. In fact, at the start of the year 2026, I was not a very prominent gold proponent. I started understanding its macro thesis. I said that okay fine like 5 10% we can make but wait for better valuation. Now gold is at a decent value, you can start adding. Okay, that's one. Second, bonds interestingly.

20:14 Okay. So for example, if you're in NRI, UAE banks, right? Middle East banks, they are offering 6% in dollar terms on bonds. Why? Because the yields in the US have gone up. So this is a very good time to lock in money for 1, two years. Okay. On bonds, do not buy defunct securities. Now what is the meaning of defunct securities? India bond platforms. Don't take India has a lot of credit risk right now. Do not take like this type of corporate bond risk in the Indian market right now. If you want to do like you know just do a bank FD right.

20:50 So just wait and then do bank FDS in India that should also be okay. Cool. So that's it right. I hope that this gave you clarity what is it that you should be doing. I hope this was useful. If it did help you do press a like button and I'll see you soon.