Jonathan Schiessl, Deputy CIO, Westminster Asset Management, says “while there is a risk in the short term of flighty capital moving out of India to lock in some of those gains. But anything more than short term, India still looks fairly well positioned because of these other factors that are at play and are leading to longer-term factors.”Do you think that market was just overheated and looking for an excuse for a correction and that is what is playing out today or could there be a bigger worry that market should not just completely rub off?I would agree that markets have done incredibly well.
This particular piece of news to which everybody is attributing the sell-off, I would say it is somewhat dubious on a timing perspective but probably it is an excuse to lock in a bit of profit and obviously in this part of the world as well, we are fully into the holiday season, liquidity gets a bit lighter and markets have done incredibly well. There are some signals out there that there is a bit of exuberance going on and certainly the markets will be ripe for a little bit of a correction.Just yesterday Citi put out a note that whatever reason might be, a India versus China trade could be in the offing. China is starting to look extremely cheap. India may not be that much because of the run-up and that could trigger near-term FII outflow outside of India. Could that play out or accelerate from here and India become a strong buy once again?That is obviously not a new concern.
India has dramatically outperformed China for quite some time now and it is a factor of the Indian market doing well and also the Chinese market doing poorly with all the issues that are going on in China – be it GDP growth or governance issues. If you look
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