Rupee meltdown vs GDP surge: Nilesh Shah’s advice for investors ahead of 2026

India’s latest GDP print brought some cheer, with the economy expanding 8.2 per cent in the second quarter and pushing real GDP to Rs 48.63 lakh crore, up from Rs 44.94 lakh crore a year earlier. But the currency market stole some of that shine. The rupee slipped to Rs 90.13 against the US dollar, a fresh record low that unsettled traders still adjusting to Wednesday’s weakness. The mix of firm domestic activity and a sliding currency set the tone for a day marked by both optimism and unease. In the backdrop of these volatilities, Nilesh Shah, Managing Editor of Kotak Mutual Fund, has laid out an optimistic investment roadmap for 2026, arguing that India’s economic cycle remains firmly in favour of long-term investors.

Rupee wobble overshadows an otherwise steady macro picture

The sudden currency dip caught the market off guard. Dealers spoke of light trade flows, choppy portfolio movements and the overhang of the India–US trade agreement, all weighing on sentiment. Even so, the broader macro backdrop hasn’t deteriorated; the rupee’s fall merely sharpened concerns for companies that rely heavily on imported inputs.

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Nilesh Shah sees a longer runway for India’s growth cycle

Jumping into the conversation, Nilesh Shah, MD at Kotak Mutual Fund, played down the jitters. He said the next decade — 2024 to 2035 — remains India’s to lose, provided investors stay patient and avoid being swayed by quick swings in the market. Long-term money, he argued, will find its reward in an economy that continues to expand faster than most major peers.

BFSI, aviation and hotels remain on Shah’s radar for 2026

Shah pointed to a few sectors where he believes earnings momentum is still intact. BFSI, aviation and hospitality are, in his view, better placed to ride through the noise and deliver stronger returns in 2026. He also expects FPI flows to turn net positive in that year as global risk appetite stabilises and domestic fundamentals hold up.

‘Rupee moving closer to its real market exchange rate’

On the rupee’s slide, Shah offered a more measured take. The currency, he said, is drifting towards its real market exchange rate, not collapsing under stress. He urged investors to read currency moves alongside corporate balance sheets rather than reacting to every sharp tick in the forex market.

Measured optimism on gold and silver

Shah remains constructive on gold and silver, citing steady buying by global central banks. At the same time, he warned that very small retail allocations often get eaten away by transaction costs, making them less efficient. If the RBI chooses to pare its gold holdings, retail investors may consider trimming exposure too.

‘Don’t treat AI as a substitute for advice’

Shah ended on a note of caution for retail investors: avoid taking investment decisions based purely on AI-driven suggestions, which cannot yet judge risk or context the way an experienced adviser can.