“If you still haven't deployed meaningful amounts of your net worth in Indian equities, it's worth considering this as a good conjuncture to do so” said Saurabh Mukherjea, founder of Marcellus Investment Managers in an interview CNBC TV 18 on July 31.
Mukherjea is bullish on the Indian markets and considers it to be a good time to invest in Indian equities. This comes as he sees GDP growth taking over the world once China’s deflationary pressures pull down interest rates. The market expert prefers investing in the private lending sector, Non- Banking Financials segment, pharma & specialty chemicals, and the China plus one sectors such as electronic manufacturing services.
He likes the banking and financials space due to their evergreen strong stance and the pharma space due to growing US demand for API which India can fulfil alternative to China. Mukherjea also believes that the sectors related to the China plus one sentiment are set to benefit in the near future.
The market veteran applauded the unusual macro cycle that India is witnessing, with GDP growth at 6.5 percent as we stand at the top of the rate hike cycle. He considers India’s macro cycle to be unusually strong with the GDP growing despite high interest rates and slightly dampening consumption.
On 26 July, the US Fed raised its interest rates to 5.5 percent, the highest level since 2001. However, market analysts believe that this may be the top of the rate hike cycle as the markets react with a rally.
Mukherjea stated that the recent rate hiking has not been able to dampen the economic growth, although, it has dampened consumption a little bit and affected the IT services segment negatively. However, he noted that “in the context of steep rate hikes, in this case of 12 months, I've never seen anything like this in my life where the whole world rates have gone up and yet economies are chugging along nicely”.
In the coming future, Mukherjea sees the Chinese economy blowing up owing to a deflationary cycle which will in turn bring down the interest rates. As the world tackles inflation, there have been predictions of a deflation in China, intriguing investors for a few weeks now.
Pointing at the banking sector, Mukherjea stated that the large lenders such as the HDFC bank, are also posting 30 percent growth and 25 percent loan book growth.
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