Q: Are the global equity markets out of the woods when we talk about inflation-related fears?
Ans:
>Inflation has peaked and is on its way down
>Crude oil price was the largest driver of inflation
>Oil prices are softening now
>Inflation is a structural problem, especially in Europe
Q: What about India? The Sensex is flirting with the 60,000 mark again and is also close to its all-time high.
Ans:
>Indian markets have surprised the most this year
>Indian markets are down only around 5% in US dollar terms
>India has been resilient and will continue to be so
Q: Will the Indian markets continue to outperform in case the global markets correct, or see a sharp bounce from here on?
Ans:
>Indian markets are likely to outperform
>Buying by locals (domestic institutions, retail investors) has held up the market
>Foreign money should allocate more to India going ahead
Q: By when do you see FII lows pick up in a meaningful way?
Ans:
>Inflation in the US will fall gradually
>Flows have already turned in favour of Indian markets
Q: Do you think the local institutional investors who bought at lower levels cash out as the markets rise gradually?
Ans:
>Difficult to predict their move
>Indian economy now in a strong structural up cycle
>Private sector capex to drive economic growth for the next 2 – 3 years
>China downturn augurs well for India
>India stands out within the emerging markets
Q: By when do you see the capex plans of India Inc come through? This is at a time when the RBI is hiking rates, which in turn could dent demand. So, why would India Inc go for capex?
Ans:
>Rate hike cycle will not crimp consumption
>Inflation under control as oil prices have dropped
>Private capex cycle will benefit from govt infra spending
Q: How do you see the corporate earnings play out over the next few quarters?
Ans:
>Earnings growth expectation in FY23 beginning were around 20%; cut to low teens now
>Banks to see double digit earnings growth; consumer sector to do well
>Infra to benefit from govt spends
>See FY23 earnings growth in mid-teens
 "Is the worst over for global equity markets?")
