The Nifty 50 index fell roughly 12% in 2026 amid elevated crude oil prices triggered by the US-Israeli conflict with Iran and $31.3 billion in foreign outflows. Axis AMC, which manages 3.66 trillion rupees, attributes the sell-off to external global yields and currency pressures rather than local economic problems. Meanwhile, steady domestic inflows highlight an ongoing shift of household savings into financial assets. To capture an eventual rebound, fund managers are prioritizing private-sector banks, domestic manufacturing, and energy over disruption-vulnerable firms.
Key points
Corporate earnings have continued to advance despite the market decline, creating an impr…: Corporate earnings have continued to advance despite the market decline, creating an improved risk-reward environment for a recovery.
Steady domestic household inflows into financial assets are providing vital support again…: Steady domestic household inflows into financial assets are providing vital support against massive foreign capital outflows.
Axis AMC is selectively targeting private-sector banks, non-bank financial companies, and…: Axis AMC is selectively targeting private-sector banks, non-bank financial companies, and electrification while avoiding firms vulnerable to e-commerce competition.
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The Nifty 50 has fallen about 12% so far in 2026 after 10 straight years of gains, pressured by higher oil prices following the US-Israeli war on Iran and record foreign outflows of $31.3 billion as investors favoured markets offering exposure to the AI boom.
"While markets are grappling with peak macro uncertainty from elevated crude prices, geopolitical tensions and global monetary tightening, India's sustained growth above 7% could brighten the outlook," said Sachin Relekar, senior equity fund manager at Axis AMC, which manages assets worth 3.66 trillion rupees ($38.5 billion).
Relekar cautioned against reading too much into foreign fund outflows, saying they reflected factors such as crude prices, currency movements and global bond yields rather than concerns about India's growth prospects.
Sustained domestic inflows highlight the long-term financialisation of household savings, with substantial funds still held in fixed deposits, he said.
His investment approach remains focused on stock selection, with AI-led capital expenditure, energy, electrification, domestic manufacturing and consumer internet among his preferred themes.
He also favours private-sector banks and non-bank financial companies due to attractive valuations and steady…
Market participants are closely watching the diversified conglomerate's core cigarette business to gauge the fallout from recent tax adjustments on profitability. Brokerages anticipate significant earnings pressure due to volume declines and tax-induced price increases, even as non-tobacco divisions offer partial operational support. Meanwhile, some market analysts view current valuation levels as an attractive buying window ahead of the financial disclosure.
Investors are actively monitoring the performance of one of the world's largest financial institutions during the current trading session. Market participants are seeking clarity regarding the underlying factors contributing to the upward momentum. A precise catalyst explaining the recent equity movement remains under active review by financial observers.
Geojit Investments strategist Anand James cautions that headline index gains mask severe weakness across broader market segments, leaving small-cap and mid-cap shares lagging behind. Meanwhile, strong sectoral accumulation has positioned technology stocks for potential sustained leadership, even as beaten-down consumer names struggle to demonstrate fundamental turnarounds.