Global PE Contraction, Not India's Macros, Poses 2026 Market Risk: Fund Managers

• Top fund managers warn that the primary risk for markets in 2026 stems from excess global valuations, particularly in developed markets like the US, rather than India's economic fundamentals.
• Sandeep Tandon of Quant Mutual Fund highlights "extraordinary complacency" in the US market, predicting a sharp correction in developed markets due to PE contraction.
• Tandon describes the current US market phase as "euphoric" rather than a bubble, expecting corrections to follow as global risk appetite shrinks and market leadership narrows to a few large companies.
• Taher Badshah of Invesco Mutual Fund anticipates mean reversion in 2026, where themes that performed strongly previously may struggle, leading to more selective markets less tolerant of high valuations without earnings support.
• Neelesh Surana of Mirae Asset acknowledges past headwinds for Indian equities but sees a "massive turnaround" in macro conditions, easing fiscal and interest rate pressures, and expects earnings growth to improve to low-teens in the coming years.

Why It Matters: Fund managers foresee global PE contraction as the main market risk for 2026, not India's strong macros.