As we approach closer to the decline of the rate hiking cycle, the Indian equities markets are still a wise investment, according to market veteran Shankar Sharma.
Sharma is sure that Indian shares would grow despite any brief trepidations in the market’s trajectory brought on by news flows from various central banks and the lingering Russian situation. Sharma stated, “I believe that the bull market in India and other parts of the world is well and fully on. “I don’t think that will be derailed by the kind of hawkish noises from various central banks,” the speaker said.
Sharma believes that the central banks will show softening by the end of CY23 or the first quarter of FY24. According to him, “the central banks have been caught off guard and they will not stop at just a surface neutralising inflation, they will overcompensate, they will over-correct… which is exactly what we are seeing right now.”
Shankar thinks that the markets are optimistic and at ease with the idea that by year’s end, we will be approaching the bottom of the current cycle of rate increases. He thinks the markets are poised for a bull run because they have fully discounted the upcoming rate hikes.
According to Shankar, “Markets have seen through this issue of inflation and this smoke and mirrors act, and they are very comfortable with what lies ahead.”
Sharma thinks that among the BRICS nations—Brazil, Russia, India, China, and South Africa—India is the only one that has maintained its strength. The BRICS nations were once thought to be the cornerstones of global prosperity. Brazil has political problems, Russia is viewed as a bad guy, and the Chinese economy is not recovering as quickly as anticipated.
On the other hand, thanks to good macroeconomic policies, microeconomic policies, political stability, and GDP growth, India continues to show tremendous growth potential. This, in his opinion, strengthens the case for foreign investment in the nation. “Of the five BRICS members, India is the only one that is currently worth considering. You can observe the resumption of portfolio flows because of this, said Sharma.