'God seems to be Indian..stay invested in the market,' Kotak's Nilesh Shah

What's good for the Indian stock market? Falling interest rates, both in the US and at home. Check.

Cheaper oil. Check. Predictable rains and a good crop. Check.

Consistent political scenario leading to policy continuity. Check.

"....God seems to be Indian," Nilesh Shah, Managing Director of Kotak Mahindra Asset Management Company, quipped in a conversation with CNBC-TV18 on the day the Indian benchmark indices, the Nifty 50 and Sensex, scaled a new high.

The market rally in India is almost "divinely ordained" and therefore, the man in charge of over ₹3 lakh crore (over $40 billion) in assets under management advises investors to stay invested and not book profits right now.

"We were worried about US interest rates rising comes up, Santa Powell comes out. We were worried about oil going to triple digit thanks to geopolitical tension God plays his role and ‘Tathastu’ oil is down to $75 (a barrel). We were worried about monsoon and while the August rains were bad September recovery happened. We were worried about Central Election and the state election results give an indication. So now you have to believe that God is an Indian, stay invested in the market, enjoy the ride," says Shah, who heads the country's fifth largest mutual fund.

Now that the US Federal Reserve Chief Jerome Powell has signalled that he's done increasing interest rates, the consensus is that more dollars will flow into emerging markets like India.

Shah believes that at least the first chunk of foreign money will move into the blue chip stocks. In 2023, the mid and small-cap stocks in India had rallied a lot more than the marquee names that make the list of India's biggest stocks by market capitalisation.

This gap between the large cap stocks and their smaller peers may start to close in 2024, predicts Shah.