Indian stock market has room to rebound, foreign investment sell-off is coming to an end, Goldman Sachs highlights shifting from growth to value (Goldman Sachs)
Goldman Sachs believes that the Indian stock market has room to rebound due to improved macro prospects, minimal foreign investment positions and repairing valuations.
Goldman Sachs believes that the Indian stock market has room to rebound due to improved macro prospects, minimal foreign investment positions and repairing valuations. Strategically, it is highlights that investors shift from growth to value, from mid-cap to large-cap, and positive rating sectors such as banks, utilities, and energy refining. The report believes that the sell-off of foreign capital is nearing its end, and as expectations for domestic economic recovery heat up, funds will gradually flow back. In addition, structurally, we continue to be optimistic about the defense and energy security themes. The market's pessimism about the Indian stock market and the outflow of foreign capital have reached extreme levels, but the expected improvement in economic fundamentals and extremely low valuations may provide a solid bottom for it, and the rebound space may be underestimated by the market. One-sentence conclusion: The Indian stock market is already in an oversold state. The combination of improving fundamentals, attractive valuations and very light foreign investment positions has created favorable conditions for a tactical rebound. Positive/negative: Positive for the Indian market, especially large-cap value stocks (banks, utilities). Market pessimism has basically priced in, and any marginal benefit may trigger a strong rebound. This is a good opportunity for layout. Catalysts: 1) 2Q26 financial reporting season (July-August), verifying corporate profitability resilience; 2) Whether there is a reversal in foreign investment flow data; 3) India's domestic economic data (such as PMI, industrial production) and monsoon rainfall.