India’s private sector capital expenditure (capex) and its relative market growth fuel Trideep Bhattacharya’s bullish sentiment on the Indian stock market. The 7 percent growth in order inflows and the resilience displayed by the private sector despite facing a lower base last year was highlighted by the market veteran from Edelweiss AMC, in an interview with CNBC TV18 held on July 20.
Relative to the global economic slowdown, India has performed strongly, said Bhattacharya. The Nifty 50 index has reported new all time highs over the past week and delivered a 9 percent return over the past six months. The Dow Jones Index on the other hand has delivered a 5.60 percent return over the past six months while the CAC delivered a 5.67 percent return. The Shanghai Composite index delivered a negative 2.29 percent return over the same period.
At 11:30 am on July 21, the Nifty index is trading a percent lower at Rs 19,772.55.
Also Read: Neutral stance on IT despite lower valuations: Trideep Bhattacharya
Reason for optimism
As the Indian market touches record highs, Bhattacharya believes that the private sector companies will report operating leverage on the back of higher topline, which is on the back of close to double digit growth. The veteran investor is optimistic that the market will find semblance in a few days and focus on the strong fundamentals of the companies rather than their temporarily low numbers.
Bhattacharya noted that “one has to calibrate this theme against a very low base which happened in the last year or a year before that which saw a significant growth. So on the higher base, the growth rates will moderate."
He believes that the headline disappointment that is coming from the weak financial numbers will be overcome in a day or two, causing a market correction.
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