He said the big pain point has been the mid and smallcaps mainly because of the liquidity issue
Neelkanth Mishra, MD and India Equity Strategist at Credit Suisse, spoke to CNBC-TV18 about the underperformance of the Indian markets compared to the rest of the emerging markets.
"In January, we saw a reversal of what we saw in Q4 of last calendar year. In January, the underperformance was almost 11 percent because of a weaker rupee and broader market was down and global markets were up sharply," Mishra said on Monday.
According to him, the big pain-point have been the mid and smallcaps mainly because of liquidity and there are uncertainty and stress with respect to the domestic growth story. "As the economy slowed in the last 3-4 months, the pace of sell-off has accelerated," said Mishra.
With regards to the consumption space, Mishra said, "For aggregate consumption number, the best measure is private final consumption (PFC) expenditure number that the GDP data talks about and that has been weak for quite some time. The discretionary numbers have weakened. The end of pay commission has a big role to play here along with stalled income transfer because of low food prices and on top of that some of the demand weakness is also a sign of monetary tightens, lack of liquidity."Talking about the interim Budget and fiscal deficit, Mishra said, "The government has more fiscal space than the market was giving it credit for. Despite the pay commission getting through, our fiscal deficit has not blown out of proportion."