Nilesh Shah of Kotak AMC emphasizes the importance of maintaining superior growth, governance, and green initiatives for India s financial markets to outperform the economic market. Engaging with regulatory authorities has increased India s weightage in the MSCI Index, narrowing the gap with China. While India jas moved from 8% to 18% in six years, China, instead of going from 30% plus to 50% plus, is now 25%.
Devendra Singhal, Equity Fund Manager at Kotak AMC, is bullish on the manufacturing sector and expects a revival in overall consumption levels. He discusses the impact of liquidity, market correction, commodities, consumer sector, and utilities on the Indian market.
Nilesh Shah explains: "Lower interest rates in India are unlikely to benefit India Inc. due to low leverage, but they do help on the valuation side, leading to higher equity market valuation. Concerns remain about India s premium valuation, but if local interest rates decrease, valuations will be re-rated, potentially pushing rating agencies to upgrade India s rating."
The commentary on the budget has had a more positive impact on the bond market compared to the stock market. The unexpected drop in yields has cheered the bond market. The fiscal deficit number of 5.1% has exceeded the debt market s expectations. The lower net borrowing program and the possibility of rate cuts in the second half of CY24 have given confidence to the market. The capital expenditure target for this year has been revised down to 950,000 crore, but there is still a 17% increase compared to last year.