'New income tax regime is yet to have any meaningful impact on ELSS schemes': AMC Expert

livemint.com:

Edited Excerpts of an interview with Livemint 1) How do you assess the current domestic and global market conditions, and what factors are you closely monitoring? Inflation and geopolitical tension are the main factors impacting the global economy at present. US inflation, still hovering above the 3% level is proving to be stickier and more persistent, hence rates are likely to remain higher for the time being and any cut is unlikely in 1HCY24. To add to the concerns, the Red Sea attack by the Houthis added to higher freight rates across the globe.

With Japan ending the negative interest rate regime, US Treasuries could be impacted to some extent as the Japanese hold a significant amount of US Treasuries. Indian market is witnessing a healthy correction, which was expected especially in the SMID space. This correction is going to be short-lived and markets are expected to continue to rise post-election and with the support of corporate earnings.

The market has already factored in a BJP-led majority government for next term and any disappointment could be majorly negative. Meanwhile, the current spell of El Nino is likely to end by May thereby raising the expectation of normal rainfall this year. This augurs well for the agrarian rural economy as well as keeps inflation under check.

2) What are your views on the Indian equity market's valuation levels, and where do you see potential opportunities? There is no doubt that the valuation looks expensive, especially in the SMID space. The ongoing correction is welcome and should be considered as a buying opportunity in a staggered manner. Amidst the backdrop of slower growth in major economies, India is in a sweet spot.