Indian equity markets are showing signs of broader participation and improving market breadth after the US-Iran peace deal, but investors should not rely solely on a potential US-Iran deal to drive further gains, according to Devina Mehra, Founder and Chairperson of First Global.
Speaking in an exclusive interview with ET Now, Mehra said that while a resolution between the United States and Iran could remove a significant overhang for global markets, it is not the primary factor underpinning her constructive view on equities.
“I don’t think we should only depend on the deal. But yes, if it happens, it takes away a big overhang overall on all markets. And I don’t think that’s what’s going to drive the Indian markets up,” Mehra said.
Market breadth has improved significantly
She noted that her market indicators had turned positive months ago and argued that the structure of the market today is markedly different from last year.
“In 2025, actually all the Indian indexes were up, but the median stock was down… Now we actually have a majority of the stocks outperforming the indexes. It’s completely flipped, which is good news overall for markets.”
Mehra reiterated her advice for investors to remain invested in equities in line with their strategic allocation rather than reacting to geopolitical headlines.
“Don’t be 100 per cent in equity but whatever is your equity allocation, remain invested,” she said.
Don’t overreact to geopolitical events
According to Mehra, history suggests investors should avoid making portfolio decisions based on geopolitical developments alone.
“Don’t overreact to geopolitics because this is what 125 years of data shows, including the two world wars, 9-11 and all of that. The market shrugs it off even when the conflicts continue.”
She acknowledged that India remains sensitive to fluctuations in crude oil prices, which can directly impact corporate earnings, but stressed that investors should wait for concrete developments rather than speculate on diplomatic outcomes.
Investor sentiment often acts as a contrarian indicator
On investor sentiment, Mehra observed that retail investors have become increasingly cautious following the market correction. “When you are panicking is when you need to remain in the market. The superpower is that you do not get out when your mind is screaming ‘get out’.”
‘The US is not the globe’
The investor also highlighted the importance of global diversification, cautioning against excessive concentration in a handful of popular US technology stocks. “The US is not the globe,” she said, adding that investors often mistake exposure to a few well-known American companies for true international diversification.
Global exposure should be a long-term goal
Mehra revealed that First Global has remained underweight US equities while increasing exposure to regions such as Europe, China, Malaysia and Mexico. She argued that Indian investors should gradually build international allocations, suggesting that 30-40 per cent of portfolios in global assets is a reasonable starting point for long-term investors.
“India is less than 3 per cent of the world market cap,” Mehra said, emphasising that global diversification remains an essential component of wealth creation and risk management.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
