But despite that optimism, Seth cautioned that the Indian stock market remains vulnerable. “That’s not to say stocks are out of the woods,” he said. “It’s going to be choppy… the market might also consolidate, because at the end of the day, if US equities are under pressure, India will feel it too.”
Also Read: This $2 trillion global fund is ‘max overweight’ on IndiaIndia’s valuations remain high compared to other markets in the region, which adds another layer of caution. “We are at like 21–22 times [earnings]. It’s not a cheap market,” Seth said.
While Nomura had called the recent correction “peak pessimism,” Seth said any rebound from here will require patience.
These are the three things Nomura is watching closely:
1. Trade and Tariffs:
He believes deals between the US and countries other than China could bring good news.
2. US-China Trade Deal:
Seth warned that the tensions between the US and China won’t go away quickly. “Some of the issues, which US has, with respect to China, these issues cannot be resolved quite quickly,” he said adding that a prolonged standoff could weigh on the global economy and financial markets.
Also Read: The 3 big mistakes investors often make — Prashant Khemka’s view
3. US Economy:
Seth said the health of the US economy is crucial. “Only in a few months’ time will we know whether the US economy is undergoing a recession or there is a kind of softish landing.”
For the entire interview, watch the accompanying video
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(Edited by : Shweta Mungre)
