India quite moderately valued; global higher for longer riskoff affecting us: Ajay Bagga
Ajay Bagga, market expert, says “PSU banks are still looking quite good. Talking about valuations, I would say India is quite moderately valued. The problem is the global macro. These higher for longer riskoff is affecting us. We have seen about six-seven weeks of FII outflows on a net basis. So that is a problem. It is a constraint on our market's ability to rise fast. But the domestic funds that are coming in, are providing a good support and those should win through.”
Are you optimistic about the October series looking at the moving pieces?
We are waiting for a couple of events to pass through. One is, of course, the looming US shutdown. Historically, it has not had much of an impact but the reports are that this could last for anything like a couple of weeks to four weeks. In 2018-2019, it went on for six weeks and it had a minor impact on the GDP. So let us get that through, especially given Monday is a holiday in India, we can wait that out.
The other two concerns are: a)Chinese property loans that are standing at about 60 trillion Yuan. It is not a new problem, it is a three years old problem but the Chinese government has not been able to resolve it and now the position is that even quality real estate developers like Country Garden are facing a lot of issues of liquidity. So eventually the rescue package will come from the Chinese government which will be a trigger for the markets so you can position for that.
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The third is, of course, oil. The Saudi internal
