The Indian market can make new highs with a little support from its global peers, Mihir Vora, Director and Chief Investment Officer at Max Life Insurance, said in an interview to CNBC-TV18
"Earnings momentum, results, and fundamental tailwinds" are there but "tailwinds from global markets are needed" for the India market to make new highs, Vora said, as he talked about the latest market trends.
To a question on which sectors or themes would lead the next leg of the rally, Vora said he has been bullish on the domestic economy for quite some time; "more urban than rural—consumption is stronger in the urban pockets than the rural ones".
He suggests sticking to domestic themes that include financials, capital goods, automobiles, hotels, industrials and EPC. "Real estate is one segment where we are seeing some traction" with good underlying demand, and it will do well if rate hike cycle cools off, Vora said.
Talking about banking stocks which have had a good run, Vora said "while the banking index is near its all-time high, in terms of valuation we are still below pre-pandemic level."
Financials are in a "goldilocks situation" for the next two quarters where the "assets are getting priced much faster, liability and deposit rates are going up but not to that extent", he added.
Government support has been key in maintaining consumption levels, especially in rural areas. "The support that the central government has given to the rural economy is almost 3-4 percent of the economy for the last couple of years and likely to be there for two years more or so."
Government programmes like production-linked incentive (PLI) schemes will bring into effect capex, Vora said. The rural economy continues to face inflation headwinds and government support would be needed on that front.
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