Updated 21 January 2026 at 15:28 IST
Global Risk-Off, Not Domestic Weakness, Driving Market Sell-Off: Deven Choksey
Deven Choksey has attributed the recent sharp sell-off in Indian equities to global risk aversion rather than domestic economic weakness. In a detailed note, Choksey pointed to rising US bond yields, geopolitical tensions, trade uncertainty, and renewed foreign portfolio investor selling as key factors weighing on markets, despite positive corporate earnings and outlook.
Indian equity markets have come under intense selling pressure in recent sessions, even as corporate earnings and medium-term outlook remain largely positive. According to market veteran Deven R. Choksey, the decline reflects a sharp shift in global risk sentiment rather than concerns rooted in India’s domestic fundamentals.
Choksey said the sell-off has been triggered by developments outside India, as investors across global markets reassess risk exposure.
“A wave of global turbulence has washed over Indian equities, dragging markets lower not because of weakening fundamentals at home, but due to a dramatic shift in global risk appetite,” Choksey said.
He pointed to rising US bond yields and escalating geopolitical tensions as major drivers of the current risk-off phase, alongside renewed uncertainty over global trade policies.
“As U.S. bond yields surge and geopolitical tensions escalate, fueled by fresh tariff threats and mounting uncertainty in global trade, investors worldwide are racing to de-risk their portfolios,” he said.
Foreign Selling, Currency Pressure Adds To Market Stress
Choksey noted that the global shift has resulted in renewed foreign portfolio investor (FPI) selling in Indian markets, as overseas funds adjust portfolios amid volatile currency and asset price movements.
“This has unleashed a renewed bout of foreign portfolio investor (FPI) selling in India, as overseas funds pivot toward the relative safety and as they seek to limit the mark-to-market losses due to sudden drop in dollar,” he said.
He added that currency movements have compounded the pressure, particularly for foreign investors assessing returns in dollar terms.
“Adding to the pressure, the rupee’s depreciation have eroded dollar-adjusted returns for global investors, prompting even deeper outflows,” Choksey said.
According to him, the combined impact of global uncertainty, capital outflows and currency pressures has pulled Indian equities into a broader global sell-off.
“The result: Indian markets find themselves swept into a global storm, caught not by domestic fault lines but by powerful crosswinds of international anxiety and capital flight,” he said.
Despite the sharp correction, Choksey cautioned against panic and emphasised patience during periods of heightened volatility.
“It isn’t the time to panic, patience is the key,” he said, adding, “Tough times don’t last forever but tough people do.”
Choksey said quality companies with strong fundamentals continue to offer long-term potential. “Good quality stocks with fundamental strength holds the promise to bounce back,” he said.
Published By : Shourya Jha
Published On: 21 January 2026 at 15:28 IST