Indian markets have had a stellar run from their recent lows in June, with the Nifty 50 index gaining nearly 3,000 points and the S&P BSE Sensex surging over 10,000 points during the period since then.
JPMorgan India believes that stock picking can still generate significant returns and that earnings surprises will continue to drive the short-term performance of the market.
“India’s growth prospects are strong,” said Sajjid Chinoy, Chief India Economist at JPMorgan told CNBC-TV18 adding that he would not worry about the rupee as this was not a 2013 situation.
The market is witnessing the strongest dollar in more than 20 years and when that happens, all emerging market (EM) currencies and all developed market currencies (DM) depreciate.
China has also vacated space in the labour-intensive export markets and this has also augured well for India.
“This is our opportunity and people see that over the next five years but in the next four-five years we will have to hunker down,” said Chinoy.
Market experts believe that the risk of a global recession has receded as both consumers and firms in the US are holding up much better.
"We don’t expect the US to go into the recession for the second half of the year,” said Chinoy.
The India story will also be a discussion point in the JPMorgan India Investor Summit which will be held on September 20, 2022, and September 21, 2022.
Referring to the summit, Madhav Kalyan, Senior Country Officer, India & CEO of JPMorgan Chase Bank, India said that, “India is an important point of discussion in boardrooms because there is slowing global growth and this is a market that offers huge growth potential.”
According to Sanjay Mookim, Head of India Equity Research & Strategy at JPMorgan a lot of investors went underweight India earlier in the year.
"Now India is one of the economies that is decoupled from the troubles of others... This is the first instance where Indian equities have outperformed despite higher oil prices,” said Mookim.
However, there is a medium-term risk of Indian equities becoming expensive.
Chinoy believes, the government has to move on with public capex and there are two challenges. “One is how do you bring your fiscal deficit down and yet continue the capex momentum which is very encouraging and how do you incentivize and enable states because they have traditionally been the movers on capex. So I still feel we need to do more capex by the centre and states to crowd in private investment in a year or two.”
For the entire discussion, watch the accompanying video
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