The Nifty 50 TRI fell 0.4% in the year through June while the S&P 500 jumped 17.7% and Taiwan's benchmark rose 30.5%, Abakkus Investment Managers said. The study says weakness is sentiment-driven, not fundamental.
The Nifty 50 TRI delivered a negative 0.4% return in the year through June 30, trailing the S&P 500's 17.7% gain and Taiwan's 30.5% jump, according to a study by Abakkus Investment Managers. Japan's Nikkei 225 rose 14.6% over the same period.
A global shift in investor money toward artificial intelligence-linked markets, particularly the United States, Taiwan and South Korea, drove the divergence, the firm said. India's more evenly distributed sector composition reduced its exposure to the AI rally, Abakkus noted. The MSCI Emerging Markets Index remains heavily tilted toward information technology, while India's index includes a broader mix of financials, consumer goods, and industrials.
The weakness is driven by sentiment and valuation, not the country's economic fundamentals, the investment manager said. India's foreign exchange reserves, domestic demand, and policy continuity all remain supportive. “The country's underlying growth drivers, including demographics, consumption, formalisation and infrastructure creation, continue to strengthen,” Aman Chowhan, head of equities - alternates at Abakkus, said in the study. “Periods of market underperformance often create the foundation for future opportunities.”
Over the past month, the trend reversed. The Nifty 50 TRI gained 2.4%, while South Korea's Kospi sank 22.2%. The study said India's structural growth drivers should support markets over the medium to long term. Abakkus believes the current underperformance is a sentiment-driven cycle, not a permanent shift.
A correction in AI-heavy markets could redirect capital to markets like India, where valuations have cooled, the firm said. The Nifty 50's forward price-to-earnings ratio has compressed from last year's highs, making the index more attractive to value-oriented investors, according to Abakkus. The investment manager expects continued inflows from domestic institutional investors and retail participants, who have been net buyers through the underperformance period.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.