The Indian market has been outperforming its global peers, especially the emerging markets, in its recent bull run. However, market veterans are worried about the high valuations and elevated premiums being witnessed currently and believe that there may be a cool-off period around the corner.
Manishi Raychaudhuri, Asian Equity Strategist-Equity Cash for the Asia Pacific at BNP Paribas, believes the kind of premium that is being seen right now compared to emerging markets (EMs) or the Asian peers is a bit concerning over the short-term.
“So it may happen that the Indian market could take a breather. We could see some kind of a time correction in the near-term,” he said.
Inflows from foreign players have increased in recent weeks with
August seeing a turnaround where foreign institutional investors emerged as net buyers of Indian shares after a gap of 10 months.
In an interview with CNBC-TV18, yesterday, Jefferies’ India Strategist Mahesh Nandurkar, India echoed a similar thought as he said that India is benefitting from the
‘there is no alternative’ factor currently.
Raychaudhuri, over a longer span of time, continues to remain positive on Indian equities. “So over the longer-term, we are still not budging from our overweight stance on India,” he said.
India has benefited from China's zero-COVID policy but there is a fundamental impetus too for the rise in the markets.
“We have seen India move back very strongly as far as economic growth is concerned post-COVID. We have seen earnings estimates of some of the core sectors like financials, some of the private sector banks they have moved up off late,” Raychaudhuri explained.
For the full interview, watch the accompanying video
(Edited by : Abhishek Jha)
First Published: Sept 6, 2022 2:32 PM IST