India’s equity market may be contending with geopolitical tensions, but this is no time for investors to panic, according to Quant Mutual Fund’s Sandeep Tandon. Instead, he believes the current backdrop offers retail investors a compelling opportunity.
“Markets are not overleveraged, sentiment is completely subdued, and positioning is very light. That’s a great combination,” said Tandon in a recent conversation. “I’m not saying I’m excited, this is a massive risk-on. But everything is endorsing India right now.”
Tandon sees a decisive shift in global capital flows toward India, driven by fatigue with developed markets and growing confidence in India’s resilience. “The same FIIs who were selling for the last two years are coming back. It’s a relative game, and India today is seen as a safer, more resilient market.”
He pointed to a confluence of global and domestic factors making the case for Indian equities. Developed markets like the US are facing macro headwinds, rising geopolitical friction, and liquidity withdrawal. “In January 2025, the developed market risk appetite was high and liquidity started shrinking, while in emerging markets the risk appetite was low and liquidity was just marginally rising. It’s a deadly combination which clearly endorses that money will shift from the US to emerging markets, particularly like India.”
Tandon believes this will accelerate a broader decoupling process from the dollar cycle. “We said the dollar index should peak out in 2025 and start getting devalued over a period of time, maybe losing its relevance also in the next few decades.”
He also sees recent border tensions as a litmus test for India’s growing geopolitical maturity. “India is fighting on the front foot and equally aggressive. This is a very strong message for the domestic investor as well as the global investor that India is safe. No major damage can happen.”
Even amid geopolitical tensions, India’s continuing economic diplomacy is a big plus, he said. “Just one day prior to this attack, we signed a deal with the UK government. The maturity of the current government is evident—they are handling terrorism and border issues on one side, while on the other, business is running as usual.”
That mix of military resolve and economic continuity is giving long-term investors more comfort, he said, especially as valuations are now more reasonable. “It’s not like India has corrected significantly, but relatively, the perceived safety is far higher in India as compared to any emerging or developed market.”
Domestic institutional investors, too, are positioned to step up. “Domestic mutual funds are buyers. They are actually sitting on a lot of cash. Family offices have sold. Retail has also sold. And now FIIs are buying.”
Tandon’s framework, which he says is rooted in behavioral finance and adaptive asset allocation, suggests acting on prevailing market signals rather than wait for clarity. “We see these escalations as a buying opportunity. We are not capitulating. We are not saying, ‘Let’s wait and settle down.’ We try to adapt to what is prevailing in global markets.”
To retail investors, his advice is: “Don’t panic. In fact, increase your holdings in mutual funds or through the secondary market. This is a great opportunity.”
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