Why long-term investors should look beyond short-term market swings

The investment manager believes India's structural growth drivers, including robust domestic consumption, favourable demographics, infrastructure creation, improving formalisation of the economy and policy continuity, continue to support the country's long-term investment case.

AI-Led markets attract global capital

According to Abakkus Investment Managers, global investors have shifted capital towards AI-led markets such as the US, Taiwan and South Korea, where investments in artificial intelligence infrastructure, semiconductors, advanced computing and data centres have accelerated.

India, however, currently has limited exposure to semiconductor manufacturing and AI hardware ecosystems. At the same time, concerns around AI-driven disruption in traditional IT services have weighed on large Indian technology stocks.

Data cited by Abakkus Investment Managers from Kotak Securities and Bloomberg (as of June 30, 2026) showed that India's Nifty 50 TRI delivered a negative return of 0.4% over the past year. In comparison, South Korea's Kospi returned 103.2%, Taiwan's TAIEX 83.2%, Japan's Nikkei 56.7% and the US Nasdaq 20.1%.

Domestic fundamentals continue to support India

Despite the near-term market underperformance, Abakkus Investment Managers said India's broader economic fundamentals remain resilient.

The fund house noted that domestic demand, infrastructure spending, consumption and policy continuity continue to provide long-term support for the economy. It also expects India to benefit over the medium to long term as global capital allocation evolves.

Commenting on the outlook, Aman Chowhan, Head of Equities – Alternates, Abakkus Investment Managers Private Limited, said:

"India's long-term investment case remains firmly intact. While global capital flows are currently being influenced by evolving technology-led opportunities, geopolitical developments and currency movements, the country's underlying growth drivers including demographics, consumption, formalisation and infrastructure creation continue to strengthen. Periods of market underperformance often create the foundation for future opportunities."

What it means for investors