India's Markets Enter 'Fosbury Moment' as Old Economic Rules Fail: DSP MF
Business
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Moneycontrol•19-01-2026, 06:52
India's Markets Enter 'Fosbury Moment' as Old Economic Rules Fail: DSP MF
- •DSP Mutual Fund's 2026 equity note, "Beyond the Efficient Frontier," suggests Indian markets are undergoing a significant shift, akin to Dick Fosbury's revolutionary high-jump technique.
- •Traditional macro signals like money supply-inflation links and interest rates-recession correlations are losing reliability, making macro forecasting less dependable.
- •India shows unique shifts: domestic investors absorb FII selling, IPOs are digested smoothly, and consumption patterns evolve with increased discretionary spending and digital adoption.
- •The market's internal structure has changed; stocks above 50x earnings now comprise 23% of the Nifty 500, up from under 5% a decade ago, while those below 15x earnings have shrunk.
- •DSP MF anticipates 2026 to bring gradual improvement with easier financial conditions and policy support, emphasizing valuation discipline and business fundamentals over macro forecasts.
Why It Matters: Indian markets are in a 'Fosbury Moment,' requiring a shift from macro forecasts to valuations and bottom-up stock selection.
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