Renowned emerging markets investor Mark Mobius has attributed the current market volatility to election uncertainty, emphasising that elections significantly impact the market as people closely monitor the outcomes. In elections, everyone is involved emotionally to some degree, said Mobius in an interaction with CNBC-TV18.
He said this emotional reaction in the market presents opportunities for investors. "If you see markets driven by emotions, you should do the opposite. If everyone is selling, you should buy, and vice versa," Mobius advised investors.
Expanding on his view that "emotion is the potion," Mobius explained that markets are influenced more by emotions than by intellect or rationality. "One must observe emotions, understand crowd behaviour, and use that understanding to make investment decisions," he said.
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Addressing the substantial outflow of Foreign Institutional Investor (FII) money, Mobius noted that the uncertainty surrounding election results is causing FIIs to pull out money. "Investors anywhere in the world tend to hate uncertainty, and the outcome of the election is uncertain."
Mobius is optimistic about market and economic performance in the event of a win by the incumbent government.
He highlighted India's potential to attract foreign technological investment as a key factor for its future growth. "India could become a hub for technical infrastructure and manufacturing, depending on the extent to which the Indian government can attract large manufacturers from China, Taiwan, the US, and other countries," Mobius said.
Mobius expects the Modi government to strive to make India more attractive in the technological sphere by loosening restrictions and encouraging more foreign investment.
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