Shankar Sharma believes India’s economic slowdown is unlikely to ease anytime soon, despite the possibility of a short-term market rebound. The GQuant founder argues that fiscal limitations, weak tax collections, and pressure on the rupee will restrict any broad recovery in 2026. He compares economic growth to a slow-moving ship that cannot change direction quickly, especially when the government must balance public welfare with fiscal discipline.
Sharma says optimism after the second-quarter results was misplaced, as earnings did not justify a bullish outlook. While global markets have delivered strong returns this year, India and the US have lagged, highlighting the cyclical nature of markets. He points out that low inflation, while beneficial for households, hurts equity performance by limiting companies’ pricing power.
On the rupee, Sharma believes India lacks the strength to influence its currency meaningfully, reflecting weak export competitiveness. He remains cautious on Indian and US markets, more positive on select small caps, and strongly bullish on global equities, particularly China, while remaining skeptical of US tech-led growth.
