There is a euphoria currently prevalent in the Indian market and people are playing into it, however, we are yet to consider the implications of what happens in the US markets and a potential slowdown in consumption, Sridhar Sivaram of Enam Holdings told CNBC- TV18 in an interview on July 6.
The Indian equity benchmarks have reached new all-time highs, despite potential rate hikes in the US posing global threats. This has created a euphoria situation in the market which, according to Sivaram, is overenthusiastic. However, he believes that the Indian markets are displaying a far better construct than the US. This is due to broad private sector financials and stronger performance by the lower end of the top 20 Indian stocks.
Sivaram stated that “you see most large markets, barring China, all are hitting new highs or very close to their new highs. While India is also participating, if you look at the emerging market construct, India has slightly underperformed”.
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Sivaram noted that while India is up merely 5-6 percent in dollar returns, other large markets such as Taiwan and Korea are up 15-16 percent. Brazil is up 14-15 percent and the entire Europe, Middle East and Africa (EMEA) market is up 20-25 percent. Amidst this broader global rally, India is participating a bit late, he said.
Although the Indian markets are rallying, global threats such as fed rate hikes, their extent and duration, is yet to be factored in. “We've been in a low interest rate environment for 15 years. How this plays out I think is anybody's guess,” said Sivaram.
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