📉 Flow-Driven Correction, Not a Structural Crack

India’s equity markets are witnessing a liquidity-led dislocation rather than a fundamental breakdown. Despite strong macros, FY26 earnings growth of 12–15%, nominal GDP at 10–11%, and credit growth at 14–16%, the Nifty’s 13% correction in March has been largely flow-driven. Record ₹1.1 lakh crore FII outflows, rising geopolitical tensions, and INR depreciation have triggered sharp valuation compression without earnings downgrades, a clear sign that markets are pricing risk more aggressively than fundamentals warrant. This reflects a classic risk-off overshoot, where liquidity drives sentiment ahead of actual data. Historically, such phases tend to reverse once flows stabilize. 📊 Bottom line: No major cracks in growth, balance sheets, or credit markets. The economy remains resilient—markets are reacting to fear, not fundamentals.