Is the Indian Market Trading at a Premium Justified?

Nitesh Shah of Elara Securities India said India is trading at a premium to many other ASEAN countries. He noted that even though the political regime is stable and progressive central policies are in place, the premium may not be justified by economic fundamentals.

When asked about what kind of industries he'd like to invest in, Shah said, "We would prefer to buy businesses that are globally competitive with the best governance and best financials." He also mentioned that such opportunities aren't limited to certain areas but are more widely available across sectors such as specialty chemicals, auto ancillaries, capital goods, consumer discretionary items/goods, specialty pharmaceuticals, and banking/finance in the private sector.

China is facing lockdown now due to rising Covid cases. Do you think Covid will still be a risk for the equity market?

China's imposition of various trade barriers on US imports may have some short-term uncertainty for the corporate sector in the US. Still, ultimately this move is positive for India as it drives US CEOs to decrease their reliance on China and look at other countries like India. With a shrinking domestic market, China's economic outlook seems uncertain. As inflation rises, the government will again face some tough policy decisions.

From an equity market perspective, we do not see Covid as a significant risk as the world has learned to live with it.

The primary reason for FIIs selling off is a strong US dollar, which is adversely affecting all emerging markets, including India. The economy is stable and improving. FDI, as well as FIIs, will continue to invest in Indian markets because they see great potential for increasing returns. Individuals should invest their hard-earned money in funds that have long-term performance, giving them freedom from short-term market volatility.

US Fed is behind the curve, and hence, it is forced to hike the interest rates to tame inflation. However, the Fed is aware that it is the distortion in the supply chain contributing to the surge in inflation. Hence, we expect them to be mindful and rationale while doing such rate hikes.

New-age investors now have the power to buy and sell shares of stock on an open market. Unfortunately, with this opportunity also comes the chance for new-age investors to make bad investments in companies that either have no longevity or are just not worth the time it takes for them to be productive for their portfolio. These investors are strongly advised to seek out education about long-term strategies that actually work so that they can help themselves avoid making costly mistakes when it comes down to building a foundation for wealth. This is important because while you want to get rich quick schemes are proclaimed everywhere along with flashy headlines; most often, those wealth schemes turn out to be nothing but just dreamers coming up with ways to bilk people of their money without providing any real value or service in return.

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