1) Indian Equities: A Rare Relative Valuation Discount:

 

 

 

• The Reality: MSCI India’s Price-to-Book (P/B) ratio relative to Emerging Markets has dropped sharply from 2.5x down to ~1.3x.

 

• Historical Context: Indian stocks are trading at their most attractive relative discount since the 2008 Global Financial Crisis.

 

• Investor Takeaway: Cyclical bottoms like this historically lead to strong mean-reversion rallies. For long-term capital (5+ year horizon), this is one of the most compelling entry points in recent history.

 

 

2) Global Valuation & Performance Landscape:

 

 

• US Anchors Efficiency: The US commands premium valuations (19.5x P/E), but backs them up with exceptional corporate profitability (ROE >22%).

 

• India & South Korea Present Rare Value: South Korea pairs high earnings (25.5% ROE) with a low 5.6x P/E, while India's Sensex (18.3x P/E) trades below its 10-year historical average—creating good entry points for patient capital.

 

• Europe & Japan Offer Steady Balance: Europe trades right at historical norms, while Japan's strong 1-year run (+36%) comes with lower overall profitability (9.9% ROE).

 

3) Big Tech Capex: Aggressive Growth vs. Cash Flow Pressure:

 

• Rising Spending: The four major US hyperscalers (Amazon, Microsoft, Alphabet, Meta) spent ~9% of revenue on capex in 2014. That spending reached ~22% in 2025 and is projected to hit ~36% in 2026 to fund AI data centers, chips, and power infrastructure.

 

• Cash Flow Impact: Capex as a percentage of operating cash flow has jumped from ~45% in 2014 to ~75% in 2025, and is approaching ~95% in 2026.

 

• Investor Takeaway: We remain constructive on AI earnings, but high cash consumption requires closer monitoring of forward return on capital.

  

4) Central Banks Are Buying Gold:

 

 

• Net Buyers: Poland (+19 tonnes) and China (+15 tonnes) led central bank gold purchases in June 2026, supported by steady buying from Uzbekistan, Kazakhstan, and Singapore.

 

• Net Sellers: Reductions were limited, led primarily by Russia (-9 tonnes) and Turkey (-2 tonnes) for domestic liquidity needs.

 

• Investor Takeaway: Short-term headwinds like high US Treasury yields do not change the long-term thesis. Central banks continue to accumulate gold as a structural hedge against geopolitical risk and inflation.

 

 

5) Soft Commodities: The Next Inflation Play

 

 

• The Sequence: Money typically moves through commodities in a predictable order during inflation cycles: Gold/Silver -> Copper -> Energy -> Agricultural Commodities.

 

• The Lag: Agriculture lags behind because higher fuel, fertiliser, and transport costs take time to work through planting and harvest cycles before impacting retail prices.

 

• Investor Takeaway: As input costs settle into food prices, soft commodities present a high-probability catch-up opportunity for late-cycle inflation protection.

 

 

Best Regards

 

Ayush Singh | Research Analyst

Neeru Seal | Partner

 

Alpha Capital Research

 

 

Investor Guidance: At current levels, it is prudent to invest only that money in equity which is not required for next 5-7 years. 

 

Disclaimer:  The perspectives provided reflect our expectations of the economy, market, and investments, which may or may not materialise. Investors are encouraged to conduct their own due diligence before investing.