Experts decode recent correction in Indian equity markets
Weak domestic sentiments are keeping the Indian equity market volatile. On the global front, the on-going geopolitical tensions between the US and Iran and the incessant US-China trade tension are raising investors' concerns.
Weak domestic sentiments are keeping the Indian equity market volatile. On the global front, the on-going geopolitical tensions between the US and Iran and the incessant US-China trade tension are raising investors' concerns.
In an interview with CNBC-TV18, S Krishna Kumar, CIO equity at Sundaram Mutual Fund, Vikas Khemani, founder of Carnelian Capital Advisors LLP and Kenneth Andrade, founder & CEO of Old Bridge Capital Management, have shared their outlook on markets.
According to Kumar, clearly the financial sector, led by the heavy weights, is showing signs of slowdown. "A couple of results which have come in on the retail banks clearly indicate that the managements are pretty cautious in terms of lending. Retail vehicle growth has been pretty muted below long-term trends and commentary is also not helping. The NBFC space continues to be in trouble with stress and low liquidity," he noted.
Khemani underscored that there was a shock to the system after the IL&FS crisis . "Liquidity almost froze, and we have still not recovered from it. Post-election, there was a hope that the new government will address this issue. That hope in my opinion is going away. There is no way you can kick-start the economy without credit supply. Whether it is an SME or large companies, the key problem right now is unavailability of money. We have not got the risk appetite. NBFCs and HFCs were providing almost two-thirds of the incremental capital supply to this segment which has disappeared," he pointed out.
Andrade has opined that the slowdown in the economy has been worrying most investors. "While they are not really throwing in the towel at this point in time, they are taking money off the table and one thing we can see across the board is that no incremental amount of money is coming back into the equity cycle." he stated.
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First Published: Jul 22, 2019 9:22 PM IST
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