Portfolio Rebalancing: Is It Time to Switch from Nasdaq to Nifty?

For much of the past decade, global capital has chased Silicon Valley’s dreams. The Nasdaq became a symbol of innovation and resilience, amassing wealth through every cycle of liquidity and disruption. But as 2025 unfolds, the story changes. The US tech rally looks tired, valuations remain high and growth visibility is declining. Against this backdrop, the question for both global and Indian investors is becoming sharper: Is it time to switch from the Nasdaq to the Nifty?

US trade appears to be fully priced

The Nasdaq’s dominance was based on a mix of innovation, monetary easing and investor optimism. Yet the cycle appears mature. The US economy is slowing, big tech companies’ margins are under pressure and fiscal uncertainty is clouding sentiment. A prolonged delay in rate cuts could also limit liquidity, a lifeline for growth-heavy assets.As I have noted in recent media interactions, the global environment suggests that while the US remains an innovation hub, US markets may deliver sub-par returns compared to emerging markets. When growth is scarce, valuation discipline matters and the US no longer offers that edge.

India’s turn in the global spotlight

India, meanwhile, offers a rare combination of growth, stability and valuation comfort. Domestic consumption remains robust, infrastructure spending is accelerating and corporate earnings visibility is improving. The Nifty has underperformed its global peers this year, making it an entry point rather than a warning sign.

Blue-chip names like TCS and ITC underline this opportunity. TCS, which trades around 21x FY26 earnings, is well positioned to benefit from stabilizing global IT demand and recovery in margins. ITC, with its steady FMCG growth and strong balance sheet, offers both income and resilience. Together they illustrate the quality bias that should define this phase of allocation.

A thoughtful rotation, not a complete switch

This isn’t about leaving the Nasdaq. American technology will continue to shape global innovation cycles. But from a portfolio construction point of view, the balance between risk and return is now tilted towards India. Investors could maintain modest exposure to US growth companies, while gradually reallocating more capital to Indian large caps, especially those that align with domestic demand and policy priorities.

I believe in disciplined realignment, not reactionary shifts. Asset rotation is most powerful when it anticipates change, not chases it.

What to watch next

The coming quarters will test both markets. A dovish turn from the Fed or a breakthrough in AI monetization could reinvigorate American technology. On the other hand, continued strength in Indian corporate earnings, lower inflation and policy stability could boost the Nifty’s upside.In essence, this is not so much a call to get out of the market, but rather a call to restore balance – away from overvalued asset holdings and towards assets supported by visible growth and improving profitability. The Nasdaq defined the last decade of wealth creation. The Nifty, with its mix of reform-driven momentum and structural tailwinds, could determine the next one.

Invest well, switch on time.

(The author Amit Jain is co-founder of Ashika Global Family Office Services. Opinions are his own)

(Disclaimer: Recommendations, suggestions, views and expert opinions are their own. These do not represent the views of the Economic Times)