The markets will have to navigate through a lot of uncertainty in May, given the rising Covid cases and extension of lockdowns across key cities. Manishi Raychaudhuri, head of Asia-Pacific equity research at BNP Paribas, tells Puneet Wadhwa in an interview that a renewed slowdown in consumption and some service sectors can lead to consensus downgrades to Indian earnings estimates. Edited excerpts:
Are the Indian markets poised for more correction?
Indian equities are likely to underperform Asian peers in the near term, particularly the north Asian markets like Hong Kong, China, South Korea, and Taiwan. We recently downgraded India in our Asian Model Portfolio from overweight to neutral. A renewed slowdown in consumption and some service sectors can lead to consensus downgrades to Indian earnings estimates, which anyway appear optimistic to us. Potential silver linings could be an acceleration in the pace of vaccination and moderation in commodity prices, particularly oil. The latter can stabilise the rupee and stem outflows from foreign institutional investors (FIIs).
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First Published: Mon, May 03 2021. 06:05 IST