So far the Indian markets have been resilient to the ongoing global crisis because the correction seen in the global markets too is not of the magnitude seen in earlier global crisis says Dipan Mehta, Member, BSE & NSE in an interview to CNBC-TV18's Anuj Singhal and Ekta Batra.
However, he adds if it were to get ugly wherein crude would shoot up by 15-20%, if there was further sell off in emerging markets and EM currencies then Indian market would certainly be impacted.
Moreover, the rally seen in the India could be a hope rally build on expectations of a change at the Centre and this could be supporting our market and attracting fund flows into India, says Mehta.
Stock specific he feels over the past two years it has been evident that there has been a shift to quality stocks - to companies that have managed better balance sheet, have low debt and those that have been transparent communication with investors and at the same time have delivered growth.
According to him the correction seen in pharma stocks on back of the geo-political issues in Ukraine is an opportunity to buy into because going forward too there is growth coming in for pharma cos from US and developed East-European markets. “This correction should certainly be bought into for investors looking to increase pharma exposure,” he adds.
Below is the interview of Dipan Mehta, Member, BSE & NSE with Anuj Singhal and Ekta Batra of CNBC-TV18.
Ekta: It seems as though however the Indian markets have shown quite a lot of resilience, we got a buy figure from the foreign institutional investors (FII) stable in yesterday’s trading session as well. In that sense do you think that the Indian markets are not going to react to adverse global cues as much?
A: Till now the damage seems to be contained and whatever correction we have seen in the global markets is certainly not of the magnitude we have seen in earlier global crisis. So, that one needs to keep in mind.
If the international scene were to get ugly in the sense that if crude oil was to shoot up by 15-20 percent or 10 percent also for that matter then certainly our markets would get impacted. If there was a further sell-off in emerging markets and emerging market currencies then our markets also will not hold. So, let us not just pat on the back as of now because the damage globally also has been quite limited.
Having said that some of the positives which have come through in the economy that being managing the current account deficit and the fiscal deficit number as well as also the fact that we have a major event coming up and there is hope of change taking place at the center. So, keeping these in mind our markets are holding up and attracting some amount of fund flow. However, one can never be sure about these international developments, we have no control over it and there is no specific roadmap that these things follow and we have seen highly volatile world over the past decade or so. This event also could just pass over and there could be no negative impact but you cannot take that for granted as of now.
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