Asset X | July 2026: Key Signals Across Asset Classes

Markets this month are telling a story of stabilization after the storm. Domestic equities look attractive at ~18x forward PE, and easing geopolitical tensions have pushed us from a staggered approach to lumpsum deployment - reflecting greater conviction in domestic equities, while we stay positive on global equities too.

In line with this, we've added 10% to our domestic equity allocation, while keeping our global equity allocation unchanged. This incremental allocation is funded by trimming debt, commodities, and InvITs proportionately.

To be clear: this is not about moving money from global to domestic equities. It's about increasing overall equity exposure by overweighting domestic equities, funded by a proportionate cut to the more conservative, non-equity part of the portfolio.

In this edition, AssetX breaks down what's changed across every major asset class and where the opportunity is opening up.

Equities

Domestic equity markets: Improving macros and double-digit earnings growth (though June quarter maybe muted) as geopolitical tensions/crude prices subside and credit growth accelerates. Valuations (large caps at forward ~18x) are benign. The rupee has stabilised on the back of RBI’s June policy package. We have been optimistic on Indian equities and moved from a staggered approach to a lumpsum deployment on June 15, 2026, following the announcement of the peace deal between US & Iran and we continue to maintain this positioning.

Global equities have been volatile in the recent period as uncertainty around the interest-rate trajectory and questions over ROI of the AI-driven capex cycle weighed on investor sentiment. Having said that, US markets continue to witness broadening of the markets, while within large caps, S&P ex Mag-7 have been better performers. New allocations can be considered through a well-diversified mix of developed markets, including the US, and select emerging markets outside India.

Alternates

Rapid advances in AI, space and defence technologies continue to drive investor interest across Unlisted Equities, including deep-tech PE and VC. However, recent IPOs listing below pre-IPO valuations have tempered appetite for late-stage private deals. The preference is shifting towards companies still two to three years from listing, where entry valuations and riskreturn trade-off may be more reasonable.

Commercial Real Estate see a steady growth path with Bangalore & Delhi NCR market leading the charge.

Fixed Income & Commodities

Domestic debt markets have witnessed a decline in yields following a series of measures announced by the RBI and the Central Government aimed at attracting foreign portfolio investment into government securities. Going forward, yields are likely to remain supported if the inflation outlook improves, FPI inflows continue to strengthen, and expectations of rate hikes in the US & India moderate.

In Commodities, both gold and silver though have strong fundamental drivers, have been volatile during the ongoing crisis. We believe, the current correction below USD 4200 for gold and below USD 65 for silver has given a good opportunity to accumulate.

Currency

INR in the recent weeks has been less volatile as measures announced by the RBI in the last MPC policy, provided support to the currency. Going forward, improved FPI participation in domestic equity, increased external flows through FCNR & ECBs and reduced geo-political tensions should help INR. We expect INR to move in a band of 90-96/USD.

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AssetX brings you facts and data that cut through market noise. We highlight the most important signals across major asset classes in the global financial markets, so your investment strategy always stays on point.

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This communication is for informational purposes only and does not constitute investment advice. Please refer to the full disclaimer in the Asset X report dated July 6th, 2026.