Indian stock market: ETMarkets Smart Talk: Thinking of going global? Better allocate higher proportion to Indian market: Amit Gupta

What is troubling Indian markets at highs? FIIs have also turned net buyers so far in November.
Indian markets after exhibiting resilience for the last couple of years have started giving breakouts.

A major concern of continuous appreciation in the dollar seems to be behind us in the near term. It has happened on account of the Euro revival and the decline in US inflation.

What is your view on the September quarter numbers which have come so far? Any trend you foresee which could last for the next few quarters as well? What have been some of the key hits and misses according to you?
Commodity producers like cement and metals have posted weak results; however, with the interest rate cycle seem to be topping out in the near term, some recovery can be seen in these stocks along with the Technology space.

High cost inventory has been absorbed by the commodity consumer companies which can lead to better H2FY23 results.

Banking stocks are back in the limelight which is a good thing because banking and financial services are the majority contributors to Nifty weightage. Do you think the trend will continue in 2023 as well?
Yes, banking stocks are coming out of quite a long NPA and low credit growth cycle. Now the NPAs have come down to decade lows and Credit to decade highs.

Also, they are sitting on high provisioning which will be written back into profits. Reforms like the Bankruptcy code have reduced risk in this space.

The Dollar index is moderating which is a good sign for India. But, from FII perspective what makes Indian an attractive destination?
Euro has 58% in the Dollar index. So far Euro was declining and thus dollar was appreciating. We have seen energy capacities in the EU are filled up to 95% before the winter season therefore energy prices have fallen from 75 Euro to 30 Euro.

In addition, the interest rates are increased by ECB. This has stopped the surge in the Dollar index which can benefit emerging markets.

What do you make of the selloff seen in some of the global tech giants? Do you see this as the first sign of an upcoming recession?
Though inflation is coming down in the US, but recession concerns will remain. This can result in lower growth for these companies.

However, the Indian IT counterparts can witness some reversal in anticipation of rise in outsourcing when labour availability is a problem in the US.

There is a growing debate with respect to the rise in FD rates and equity returns. How has the market performed in the past when interest rates were on the rise?
FD rates have to be increased in Indian banks as Bank’s need money to fund the growing credit growth.

However, as food inflation in India is in control due to better monsoons and upcoming winter crop, we can expect Indian inflation can cool off towards the end of FY23, thus restricting rate hikes.

We are a few per cent away from record highs. Do you foresee a new bull cycle in 2023 ahead of the Budget 2023?
When global markets are in a slowdown, sharp and consistent FII inflows may not be seen. We will be driven more by domestic flows.

Thus, markets can remain elevated and can witness more time correction after a brief period of the surge which we are seeing currently.

How should investors play the international investment theme in 2023?
Investors can use the recent declines in the US markets by buying in S&P ETFs and individual stocks. However, higher growth is expected in India where the majority of allocations should be deployed.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)