Every market euphoria needs a correction; resets are healthy; says Sunil Singhania of Abakkus

Sunil Singhania, founder of Abakkus Asset Managers

Every market euphoria or excess eventually requires a reset, and what follows is often healthier, said Sunil Singhania, founder of Abakkus Asset Managers, while talking about the recent market correction.

Drawing an analogy, he shared a personal example—recently shaving his head for healthier regrowth. "Markets function the same way," he explained.

"Once excesses are removed, the growth that follows is far more sustainable."

Singhania said that India will experience a W-shaped recovery rather than a V-shaped one, as stock valuations remain elevated.

India is seeing a correction after a long period of three-to-four years and the correction needed reasons to support it, he said. The reasons for the market correction were disappointing GDP numbers, weak corporate profit numbers, and uncertainty of dollar movement, he said.

Singhania said that investors should maintain a constructive outlook. The US represents 4% of the world's population, yet holds 70% of the global market share and 50% of the world's debt. At some point, even a 3-4% capital shift between countries translates into $3-4 trillion in movement.

"If India captures just 5% of that shift, it could bring in $150-200 billion in capital inflows. If that's the case, profit growth will be at least 11.5%," he added.

On Trump tariffs

Singhania added that it was the relevance of Trump tariffs is gone. "On Monday you said tariffs, Tuesday you said no tariffs, Wednesday you said tariffs, and so on," he said.

At some point, repeated warnings and interventions lose their impact, he said. "Just like in a household, where constant shouting eventually gets ignored, global markets will also adapt and move on. While new developments will continue to influence markets and create short-term concerns, the broader economic picture remains unsettled" he said.

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