'If we do get some election-related spending and maybe some of the cement stocks that have performed poorly over the last year might benefit from that,' said Adrian Mowat.
Richard Harris, chief executive of Port Shelter Investment Management and Adrian Mowat, emerging equity markets strategist, shared their views and outlook on Dow’s first 3-day winning streak since November, China-US trade talks progress and weak dollar.
"It looks as if things are a lot better. I think the unique thing that we are seeing at the moment is that valuations are very cheap. Markets are obviously looking a lot better shaped than they were during the other crisis," said Harris.
"I think the fascinating thing is that India has outperformed China substantially. India has its own issues but India has done a lot better than China and you might say that India is too expensive but the fact remains that there is still visible growth in India whereas China is very opaque and we cannot tell at the moment," he added.
Talking about market prospects this year, Mowat said, "I think at least we can have a very good half in the first half of 2019. We are starting after a big fall in markets in the final quarters last year and the markets were falling because of this fear around the US economy and the data that is coming out of the US economy doesn't support this recession fear. I think the employment numbers were absolute Goldilocks. In that you had an increase in the unemployment rate, even though you are creating more than 300,000 new jobs and you could get this environments in the US where they create a lot of jobs and that increases the participation rates so it reduces the threat of inflation but gives you a very strong economy. If that is the dynamic then US equities and global equities are very cheap at this point in time".
With regards to India's economic growth and outlook, Mowat said, "I think the outlook for India is fine macro-economically. I would be looking at the weaker performance over the last one year. If we do get some election-related spending and maybe some of the cement stocks that have performed poorly over the last year might benefit from that, some spending on the rural sector, two-wheeler stocks to benefit from that. So rather than the market which is being dominated by the performance of the IT stocks, selected financials because there are some financials at the bottom of the table as well, we need to see this coming through and the stocks are down over the last 12 months beginning to perform if India is going to have a strong year relative to the other markets."
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