India never had a stock market boom without a US recession, says Marcellus' Mukherjea

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26 Aug, 2025 12:21

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A recession in the US has historically been a positive thing for India, according to Saurabh Mukherjea, founder of Marcellus Investment Managers.

First, a US recession leads to a fall in crude oil prices which benefits India's Balance of Payments. Second, it brings down 'the cost of money'.

"So if you look back at the last 40 years, we never had a stock market boom in our country without a recession in America," Mukherjea told CNBC-TV18 in an interview.

"The reason a US recession historically has been good for India is twofold. It conks of oil prices and brings down the cost of money," he said.

Assessing the prospects of IT stocks from a medium to long-term perspective, Mukherjea said that companies like TCS, Infosys and HCL Tech have been performing well and expects the upbeat performance to continue based on healthy results.

"Indian IT services companies will carry on getting plenty of work," he said. "I don't understand why anybody was bearish (on IT stocks) and it doesn't make any rational sense to me."

Earlier today, Indian benchmark indices made a gap-up opening with Sensex soaring 1,000 points and Nifty rallying over 250 points after global cheer and strong IT results spurred stocks.

All sectors traded in the green with Nifty IT index gaining 2.6 percent, led by HCL Tech, Infosys, and Tech Mahindra.

Also read: Markets cheer IT earnings and global rally

"And therefore, the focus should remain on buying high quality Indian companies rather than doing some macro forecasting after reading the morning newspaper", he mentioned.

Talking about the auto sector, Mukherjea said the sector has been witnessing growth after demand picked up in the four wheeler segment post the pandemic. Meanwhile, believes the two wheeler segment continues to struggle due to lower demand.