Over the weekend, I met a cross-section of market participants at a social gathering—veteran investors, traders, money managers, and brokers. If I had to summarise the overall mood in one word, it would be “befuddled.”
There was a clear sense of cognitive dissonance in the room. People were wrestling with conflicting signals and contradictory beliefs. The discussions felt like watching multiple emotional currents collide beneath a calm surface.
On one hand, there was frustration about personal portfolios lagging. On the other, there was comfort in seeing the benchmarks hold up well. Add to this the fear triggered by headlines predicting an imminent burst in the AI bubble; anxiety over rising Japanese bond yields and a weakening INR; excitement around a potential Indo-US trade deal; and hope that Indian equities may outperform if global markets slip into turmoil.
Amid this emotional tug-of-war, a few broad positioning trends stood out:
Active participants remain overweight in narrative-driven themes — defense, infrastructure, railways, specialty chemicals, semiconductors, data centers, EVs, renewables, and so on.
Many traders have taken FOMO-fueled leveraged bets in precious metals, despite elevated prices. Interestingly, no one mentioned any meaningful crypto exposure.
Despite broad bullishness, there hasn’t been major reshuffling within banking, though money clearly continues to drift from private banks to PSU banks.
Exposure to unlisted names, small caps, and microcaps remains significant.
Sentiment on capital-market-linked stocks has cooled from “exciting” to “neutral,” even though actual positioning hasn’t caught up with this shift.
The mindset seems to be slowly moving from “buy the dips” to “sell the rise.”
Notably, nobody brought up terms like economic reforms, the Budget, macro fundamentals, geopolitics, or economic growth. Bihar’s election outcome came up only as a surprise, not a market factor.
The idea of a December rate cut was casually floated as a reason for a year-end, consumption-led rally—but only a couple of participants seemed genuinely enthused by it.
If I step back and look at the mood, the sentiment pendulum feels balanced—caught somewhere between Greed and Fear. This is despite the negative market breadth, persistent FII outflows, and the relentless drumbeat of bearishness on social media.
A major global shock—something like a Lehman-style event—could easily push that pendulum towards Fear. A successful Indo-US trade deal could just as quickly swing it towards Greed.
For now, though, it sits quietly at the center.
