The milestone of 20,000 achieved by Nifty reflects India’s strength and is a result of several governmental policies built over the years, Nilesh Shah, MD, & CEO of Envision Capital, told Moneycontrol in an interview on September 12.
Shah believes that Nifty’s upside potential remains significant for long-term investors. This comes as the Indian economy is expected to sustain relatively high growth rates, corporate India is running strong, the balance sheets of banks are strong.
“On the whole, we are on a great confluence of amazing macros and micros put together in a perfect blend to benefit equity investors for the long term,” said Shah.
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The market expert is bullish on the Indian economy in the long term, owing to its relative strength compared to global macro-economic environment as well as India’s roaring success at the recently concluded G20 summit.
However, Shah remains cautious in the short-term due to a potential rise in crude prices. “A rise in crude prices beyond the $90-100 a barrel level could cause a dent in the Indian macros” he said.
Shah calls crude the single biggest monitorable that one needs to be concerned about due to its direct implications on inflation, interest rates, growth rates, trade deficit and out currency.
The market expert believes that the Mid and Smallcap spaces are still good investment options as they are coming out of hibernation after 10 long years. “They are breaking out of the long-term spell of underperformance now” said Shah.
He highlighted that several reforms such as GST or the digital public infrastructure have helped in building a level-playing field for the Mid and Smallcap stocks in the Indian markets.
On September 12, the Nifty Midcap 100 index closed 3 percent lower at 40,170.30 and the Nifty SmallCap index ended 4 percent lower at 12,450.20. The indices have delivered a 30.77 percent and 33.49 percent return over the past six months.
Advising new investors, Shah stated that he sees the next leg of the rally will revolve around the 3Cs - Credit, Consumer and Capex plays.
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