“We turned positive on the Indian market in March 2023, which was at the cusp of the recent rally,” says Kunal Vora, Head — India Equity Research, BNP Paribas India. In an interview with ETMarkets, Vora said: “For local investors in the high tax bracket, equities are likely to continue providing best after-tax returns in the medium term” Edited excerpts:US downgrade led to some volatility in markets across the globe. Where do you see the markets?The US downgrade has not had any meaningful impact on bond yields in India and despite the initial nervousness, we do not expect it to have any long-term impact on Indian equities.
While we have seen a rally since March 23 and there was a slight pull back, the Nifty50 is up by around 7% YTD, which is not very high. Indian market is currently supported by both fundamentals as well as flows. Macro picture has improved because of cooling commodity prices, moderation in inflation from the peak levels and resilience of earnings.
Flows remain strong from both local investors as well as FII's. FII have invested USD20b in India over March-July 2023. That along with resilient SIP flows have supported the market.Some global brokerage firms upgraded India earlier in August. But what about valuations? We turned positive on the Indian market in March 2023, which was at the cusp of the recent rally.
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