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Daily Voice | Consolidation to continue over next couple of quarters, but don't see more than 20% correction: Jitendra Arora of ICICI Prudential Life

Investors have traded Indian markets at a premium to emerging markets as they see it as a large market that has the potential to deliver double-digit nominal growth over the next decade. We don’t see that changing quickly unless we falter big time on our growth.

April 30, 2022 / 04:04 PM IST
Jitendra Arora

Jitendra Arora

We like the Indian story from a medium-to-long-term perspective as it has growth drivers on its side and can continue to grow at mid to high single digits on a real time basis over the next couple of decades," Jitendra Arora, Executive Vice President & Senior Equity Fund Manager at ICICI Prudential Life Insurance said in an interview to Moneycontrol.

In the short term, ICICI Prudential expects markets to remain volatile and consolidate over the next couple of quarters as it awaits clarity on the geopolitical situation, impact of withdrawal of stimulus by policyholders and steady demand as Covid becomes more routine than an exception, but ruled out a major correction (more than 20 percent) in the markets from the current levels, said Jitendra Arora.

Considering the macro issues, is there any possibility of major price correction in coming days?

Indian markets are trading at a premium to their peers. Premium of MSCI India P/E (price-to-earnings) to MSCI Emerging Markets (EM) is close to all-time highs. The MSCI India P/E is currently at around 85 percent premium to the MSCI EM compared to an average premium of around 45 percent over last 15-16 years.