A persistent divergence between foreign and domestic institutional flows continues to define the trajectory of Indian equities, even as valuations begin to look more reasonable after last year’s excesses. While foreign institutional investors (FIIs) remain cautious, steady domestic inflows are providing a crucial cushion to the market.

Speaking on the evolving dynamics, veteran investor, Manishi Raychaudhuri, noted, “Now, the phenomenon that you mentioned that FIIs are selling and they have been selling for last 18 months roughly and the domestic institutions buying, that is not something new. I mean, we have seen this for last 18 to 24 months.”

He added that the sustained outflows from FIIs have been offset by robust domestic participation, particularly through systematic investment plans (SIPs). “The spate of FII selling has been neutralised by this massive systematic investment plans, the SIPs, that continue to come in, almost about $3 billion every month.”

Global Opportunities vs India’s Structural Story

According to Raychaudhuri, the reluctance of foreign investors is not necessarily a reflection of weakness in India alone, but rather a function of relative attractiveness elsewhere. “The foreign investors have a large firmament, a large universe to choose from and compared to India, they have better choices elsewhere in the emerging market space.”

He pointed to North Asian markets, where themes like artificial intelligence and related capital expenditure remain strong, alongside relatively lower geopolitical risks. “So, it is a combination of stronger growth and slightly lower risk that the FIIs are playing.”
In contrast, domestic institutional investors continue to benefit from a structural shift in household savings. “This is a direct consequence of the financialization that we have seen, it is not recent, it has been there for about last five to seven years.”
Importantly, he believes this trend still has room to run. “Indians are on an average still underinvested in equities… maybe it is still about 85-90-95% of Indian investments would remain focused on the home markets.”
Valuations Cooling, But Earnings Still a Concern
India’s valuation premium, once a major deterrent, has seen meaningful moderation. “At the peak in September 24 India’s price earnings multiple 12-month forward price earnings multiple was 87% higher… The last 15 years average is about 38-39%. And today India’s premium has actually come down below that level.”

He noted that the current premium of around 35–36% makes India relatively more attractive again. However, that alone may not be enough to trigger a strong return of FII flows. “The FII universe as a whole is not biting into this yet simply because the earnings environment is not yet supportive.”

Highlighting global comparisons, Raychaudhuri said, “If you look at last six months… you have Korea right on top… about 80% upgrade… Taiwan… 20-25%… But the Indian consensus EPS estimate… has still declined over the past six months by about 4.5% or so.”

This lag in earnings revisions remains a key overhang.

Macro Triggers and the Earnings Outlook
The outlook for earnings, in turn, hinges on a mix of fiscal, monetary, and external factors. “At some point this large fiscal stimulus that went in in 2025… will begin to have some effect… but it needs to be more sustained.”

He also indicated room for monetary easing, subject to inflation trends. “The central bank can perhaps afford to cut rates a little more… if we do have a situation where the Middle East situation settles down… we could have this concern about earnings destruction behind us.”

A moderation in crude oil prices toward the $60–70 per barrel range could be particularly supportive.

Can Valuations Hold?
On the question of sustainable valuation levels, Raychaudhuri struck a cautious note. “If you look at last 15 years average one year forward PE for India, it is about 18.8 times.”

However, he warned that valuations cannot remain elevated without earnings support. “If it remains in single digits, then those high-teens kind of PE are unsustainable.”

He emphasized the importance of reverting to a healthier growth trajectory. “Unless we get back to that situation… nominal GDP growth of about 10% to 12% and therefore corporate revenue and earnings growth of 13% to 14%… it will be difficult for these long range PE multiples to hold on.”

Sectoral Preferences: Banks, Industrials, Consumption
Despite near-term uncertainties, Raychaudhuri remains constructive on select pockets of the market. “Private banks… I have been kind of thumping the table on this for quite some time.”

He also highlighted opportunities in industrials and defence. “Defence expenditure is likely to rise stratospherically across the world… Industrials would also cater to India’s infrastructural ambitions.”

On the consumption side, he sees broad-based potential. “I would also be looking at consumer discretionaries in India… auto companies… household electronics goods… even some of the hospital and diagnostic chains.”

Additionally, cyclical sectors could offer tactical opportunities. “In the near term some of the cyclical sectors like base metals could also do well.”

IT Under Pressure
One notable exclusion from his preferred list is information technology. “I have stayed away from Indian IT for… almost a year now.”

He believes structural changes driven by artificial intelligence could weigh on the sector. “Indian IT… they are the classic AI losers… the average man-hour rate comes down and therefore the valuations of the IT companies come down.”

With earnings growth in single digits and valuations still elevated, he added, “They are trading at about 18 to 20 times PE, simply not sustainable.”

The New York Times Connections puzzle for Wednesday, March 18, 2026 — game #1011 — is live now. This daily word-association challenge tasks players with grouping 16 words into four themed categories of four words each. Categories range from straightforward (yellow) to tricky (purple), and the puzzle resets at midnight local time.

Today’s puzzle features words including: REVERB, WINCE, DELAY, SPELL, REALITY, PERIOD, YELL, RAIN, WAH, WHAMMY, STRETCH, PATCH, HOP, BLANK, COAT, CURSE.

### Hints for Today’s Categories (No Spoilers Yet)
Ranked from easiest (yellow) to hardest (purple), here are subtle clues to guide you without giving away answers:

– **Yellow (easiest):** These words all represent a span or duration of time or activity.
– **Green:** Physical or vocal reactions you might have after hitting your toe on furniture.
– **Blue:** Common names for sound-modifying devices guitarists use on their pedalboards.
– **Purple (hardest):** These complete the phrase “___ check” in different contexts (like insurance, fashion, weather, or existential questions).

If these hints aren’t enough, scroll down for the full solutions — but beware of spoilers!

### Full Answers and Categories
Here are today’s Connections groupings:

– **Yellow: Interval** — PATCH, PERIOD, SPELL, STRETCH
(All synonyms for a length of time or a temporary phase.)

– **Green: React to a stubbed toe** — CURSE, HOP, WINCE, YELL
(Typical instinctive responses: swearing, jumping on one foot, grimacing in pain, or shouting.)

– **Blue: Guitar effects pedals** — DELAY, REVERB, WAH, WHAMMY
(Popular stompbox effects that alter guitar tone: echo/delay, room-like ambiance, vocal-like filter, pitch-shifting dive bomb.)

– **Purple: ___ Check** — BLANK, COAT, RAIN, REALITY
(Phrases: blank check (unlimited authority), coat check (cloakroom), rain check (postponed offer), reality check (dose of truth).)

Many players found the purple category the trickiest due to its idiomatic nature, while yellow and green clicked quickly for most. The blue group often required thinking about music gear, which tripped up non-guitarists.

Connections #1011 is considered moderately difficult by community standards, with no widespread reports of one-word misleads or overly obscure themes. If you solved it in four guesses or fewer, congrats on a strong performance!

Play today’s puzzle directly on the NYT Games site or app. Remember, there’s also a Sports Edition variant for sports-themed groupings if you’re looking for more.

How did you do? Share your grid (e.g., using emoji squares: 🟨🟩🟦🟪) in the comments below. Good luck tomorrow!

US President Donald Trump has lashed out at Australia and other allies for failing to commit warships to secure the Strait of Hormuz.

Trump previously called for support to help secure the strait, which has been closed off by Iran.

Trump Lashes Out at Australia, Other Allies

According to 9News, Trump took to his Truth Social account to lash out over the lack of support in a war that has kept him increasingly isolated.

“Because of the fact that we have had such Military Success, we no longer ‘need,’ or desire, the NATO Countries’ assistance — WE NEVER DID! Likewise, Japan, Australia, or South Korea,” he said in his post.

“In fact, speaking as President of the United States of America, by far the Most Powerful Country Anywhere in the World, WE DO NOT NEED THE HELP OF ANYONE!”

His post, in full, can be viewed below.

Donald J. Trump Truth Social Post 11:18 AM EST 03.17.26

The United States has been informed by most of our NATO “Allies” that they don’t want to get involved with our Military Operation against the Terrorist Regime of Iran, in the Middle East, this, despite the fact that almost…

— Commentary Donald J. Trump Posts From Truth Social (@TrumpDailyPosts) March 17, 2026

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Albanese Government Insists No Formal Request Made

Despite Trump insisting that he had spoken to allies regarding his request for warships, Anthony Albanese government has pushed back and said no formal requests have been made regarding the matter.

According to Sky News, Treasurer Jim Chalmers said on Wednesday that “It’s not something that we’ve been considering in terms of sending battleships to the Strait of Hormuz.”

“We get all kinds of requests, but I’m not aware of that being one of them,” he added. “And we’ve made the nature of our military commitment really clear.”

Chalmers reiterated this in an interview with ABC, saying, “There wasn’t a formal request to send ships to the strait.”

“It’s not something that we’ve been considering in the almost daily National Security Committee meetings that have been taking place over the course of the last couple of weeks,” he explained.