The Nifty 50 is bleeding. Down 15% so far in 2026, the benchmark index sits among the global laggards, dragged down by a brutal combination of sustained foreign outflows topping $30 billion, spiking crude prices, and a currency sliding to record lows. It’s a messy setup for long-term holders, but Alessia Berardi, head of global macroeconomics and emerging markets strategy at Amundi Investment Institute, sees the bottom. Her firm, which manages over $50 billion in global assets with nearly $57 billion direct and joint-venture exposure in India, is positioning for a violent rebound.
The trigger? The Iran war. Berardi told Bloomberg that the conflict acted as the "tipping point" for global risk aversion, specifically punishing oil-dependent economies like India. Higher crude bills fed directly into inflation, forcing the Reserve Bank of India to hike rates for the first time in three years. But with the war nearing its end, that structural headwind is evaporating. The RBI’s own data supports the recovery thesis: after a 7.8% growth print in Q1 FY26, the central bank raised its full-year GDP forecast to 7.1%, up from 6.7%.
Berardi isn’t just hedging; she’s betting on specific sectors. She calls India’s defence and manufacturing spaces her top picks. The data backs her logic—the Nifty India defence index has already outperformed the broader market, posting a 16% gain this year. "If you look at the equity market, you have this pessimistic perception on India, but I’m more in the other camp right now," she said. "I’m seeing the seeds of a good economic performance."
The math is simple: if oil prices stabilize and foreign capital stops fleeing, the valuation gap closes. For traders watching the Nifty, the next few weeks will be critical. Watch for a reversal in the USD/INR pair and a pause in FII selling volumes. If the Iran ceasefire holds, the 15% drop might look like a buying opportunity in hindsight. The risk? If inflation stays sticky, the RBI could tighten further, capping the upside. But for now, Amundi’s $57 billion bet is on the turn.