22 January 2026
The past
year has been a challenging one for equity investors, even as economic and
corporate fundamentals have remained largely supportive. Interest rates have
eased, GST reductions have been implemented, GDP growth has exceeded
expectations, and corporate earnings, on the whole, have remained stable. Yet,
despite these positives, stock market performance has stayed subdued.
India
continues to be the fastest-growing major economy in the world. However, market
sentiment has failed to mirror this strength. The primary reason for this
disconnect has been sustained selling pressure from foreign institutional
investors, which has weighed on stock prices across sectors. Importantly, this
selling has not been driven by any broad-based deterioration in business
fundamentals.
It is
crucial to understand that the current phase represents a cyclical slowdown,
not a structural breakdown. Most macroeconomic indicators remain favourable,
balance sheets are healthier than in the past, and long-term growth drivers for
the Indian economy remain firmly in place.
History
offers valuable perspective. Every prolonged phase of market underperformance
in India has eventually been followed by a period of recovery and wealth
creation. This pattern has repeated itself consistently since the inception of
Indian equity markets.
For
long-term investors, periods like these test patience and conviction. However,
they also reinforce the importance of staying invested in fundamentally strong
companies rather than reacting to short-term market movements. Disciplined
investors who maintain focus during uncertain phases have historically been
rewarded when sentiment eventually turns.
Market cycles are an inherent part of investing. They have always turned in the past—and there is little reason to believe that this time will be any different.
For your success!
Dr. Anil Kumar Asnani
SEBI Reg. Research Analyst
Whatsapp: 9755920780
Mobile: 9131361959
Website: https://www.smartverc.com
Here at Smart VERC, you have one point of contact on Phone, WhatsApp, and Email: a highly-skilled, detail-oriented individual who can resolve almost all your issues.