India Equity Strategy Factor Investing – Aug’26: Stay Long Momentum as QMI recovers

Research evidence excerpt

J P M O R G A N

Global Markets Strategy

05 August 2026

India Equity Strategy

Factor Investing – Aug’26: Stay Long Momentum as

QMI recovers

In July, Quality was the standout outperformer in the Nifty 500, on both long/short and

long-only bases. Momentum, by contrast, was the worst-performing factor, in line

with the global MOMO selloff. This led to our All-Weather composite giving back

some ground even as it continues to perform well across timeframes and cycle

regimes. India Composite Momentum corrected ~3.8% peak-to-trough (Jun 22-Jul

8), but recovered by month-end. Momentum in India looks reassuring on both its own

trend and valuation. On trend, Composite Momentum still sits well above its 12month average, so the usual pre-selloff warning is absent. On valuation, the Long vs

Short spread is at its historical average levels, with none of the crowding that drove

the global move. We therefore stay constructive on Momentum, especially where

price strength is backed by earnings revisions. We pair this with Quality

discipline, while avoiding Value. On cycle, the QMI has continued to recover

following March’s downturn, typical of mid-cycle dynamics. Improvement is broad

across components, alongside recent macro resilience. Consistent with mid-cycle

patterns, small- and mid-caps continue to outperform large caps (YTD: small caps

+9.9%, mid caps +4.6% vs Nifty 50 -5.8%).

Factor Performance. In July, Quality was the standout outperformer, both on

a L/S as well as a L/O basis, in the Nifty 500 universe. Conversely, Momentum

in India was the worst performing factor, in line with the historic global

unwinding of the momentum factor (MOMO selloff). Our 'All-Weather'

composite gave back some ground in July, though it continues to do well across

timeframes and cycle regimes. See Figure 1 and Figure 2 for the performance

summary.

e

lctp

-O

g

n

fL

ryo

a

m

u

S

Equity Macro Research

Rajiv Batra AC

(65) 6882-8151

J.P. Morgan Securities Singapore Private Limited

Rushit Mehta AC

(9122) 6157-3711

J.P. Morgan India Private Limited, J.P. Morgan

Tower, Santacruz(E), Mumbai - 400098, SEBI

Registration: INH000001873, (91-22) 6157-3000.

Mixo Das AC

(852) 2800-0511

J.P.…