Nervousness to linger in markets even if NDA forms govt, fiscal math a major focus: Shankar Sharma

Shankar Sharma, founder, GQuant Investech

Markets saw a steep fall on June 4 as investors disappointment grew following an underwhelming vote tally for BJP-led NDA. Going forward, market veteran Shankar Sharma expects markets to be nervous for even if NDA forms the government. He believes that participants will majorly focus on bringing back fiscal discipline.

"Market rally in the past 3-4 years has seen fiscal deficit push growth. Our GDP is direct outcome of fiscal deficit, hence the government needs to review if it can run relatably high fiscal. We believe that India will grow irrespective of who is in power, even coalition govts have delivered growth in the past," Sharma added.

Benchmark indices Sensex and Nifty have surged up to 40 percent each in the past 3 years. The bull run, Sharma believes was being led by mid-and smallcaps. He doesn't believe that the trend would change from here on.

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"I see a bright future for smallcaps barring this sort of earthquake for few days. If you have a reasonable visibility, 20-30 percent fall is the most you will see in the markets, but you can go back to the same names with lower valuations," he expressed.

From a long-term perspective, India continues to remain a major market that even foreign institutional investors cannot ignore. "FIIs have seen periods of wobble, but they are very well aware that India always strives through," he Sharma added.

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