Markets evenly poised; expect high teens earnings growth; focus on domestic-oriented sectors, says Anand Rathi

livemint.com:

Anand Rathi, Chairman of Anand Rathi Group believes the markets are evenly poised on the valuations front. He does not see any risks to corporate earnings right now and expects earnings growth in the high teens for the next two years.

In an interview with Mint, he said there are plenty of opportunities available for investors now. With the release of the latest dot plots and the guidance of further hikes, if inflation remains high, the markets have largely priced in the Fed’s anticipated moves and are now more focused on inflation data which is showing initial signs of cooling off.

China is struggling to get back to its normal growth post covid and we have seen measures like rate cuts, liquidity infusion etc., being taken to revive the economy there. Also, Europe is showing some signs of a deteriorating economic situation and the latest data suggests it has entered a technical mild recession.

However, coming to the US, the economy there is still showing resilience and if you look at the data the overall consumer spending is still strong rising by 3.8 per cent in Q1-23 and both households and businesses have historically low amounts of debt. So, global growth may be slow, but there is a low probability of any contraction.

Coming to India, certainly, there are some risks to the growth if there is a significant global slowdown which may also affect our exports but I think this largely is balanced out by strong domestic growth led by aggressive investments towards creating infrastructure, promoting investments across multiple important sectors through its successful production-linked incentive (PLI) etc. and the impact could be few basis points which has already been seen in current year GDP forecast which have been revised