Despite slowing earnings growth, India still seen as equity haven

There's now a visible shift in capital moving out of the US—a trend not seen for many years. Swanand Kelkar Managing partner at Breakout Capital Advisors

- Dipti Sharma

I've never believed there's a time when there's nothing worth buying—whether in India or anywhere else," says Swanand Kelkar, managing partner, Breakout Capital Advisors, who has been a stock picker for over two decades. Nonetheless, he thinks finding compelling ideas in India has become tougher, especially given how well stocks have performed.

Growing doubts about US growth have sparked a shift in global capital, with India emerging as a key beneficiary. At its peak, the US comprised nearly 70% of the MSCI All Country World Index, highlighting extreme concentration.

Edited excerpts

What's the mood like in global markets?

There's now a visible shift in capital moving out of the US—a trend not seen for many years. When we used to pitch emerging markets or India, the reply was "Great story, but the US is where the money is." Led by the Magnificent 7, the US markets were doing quite well, and this preference was evident in US's dominance in global indices and capital inflows over the last five years.

However, this one-sided trade is slowly shifting. Growing interest in deploying capital outside the US is driven partly by questions about US growth sustainability. At its peak, the US made up almost 70% of the MSCI All Country World Index, showing how concentrated global allocations had become.

Now, with cracks in that narrative, we're seeing money flow out, with India as one of the beneficiaries. In recent weeks, there has been a steady positive flow, and institutional investors are increasingly focusing on new geographies. While institutional capital moves gradually, there's a clear sense that investors are reassessing their US-heavy allocations and diversifying into global equities. India, with its market depth and strong fundamentals, is naturally part of those conversations. However, these are still early days, and markets can shift quickly.