The Indian market is always tied with global stock market despite domestic flows coming in and will feel the impact in case of a global correction, says Sharma
In its ninth year, the global bull market may be at risk as global correction might come soon, said chief global strategist at Morgan Stanley Investment Management. However, In India, the bull market is likely to continue since there are no factors to derail the ongoing rally, he said in a chat with Zee Business.
Global events like tightening of interest rates, among others could, however, lead to a fall in the US stock market, he said.
The Indian market is always tied with global stock market despite domestic flows coming in and will feel the impact in case of a global correction, he said.
Stock markets are performing better than economies on the back of liquidity surplus given the low-interest rates in US, Europe and Japan.
“In a way, this is the weakest global recovery amid the strongest bull market,” Sharma said.
The valuations in the global technology sector are on an upsurge, so a correction is likely, he said. However, in India, the technology valuations haven’t risen much.
“The outsourcing model of US President Donald Trump will face challenges in the era of deglobalisation,” Sharma said.
While the current tension between the US and North Korea might “sound sensational”, South Korea has remained mostly unruffled amid the geopolitical tumult, he said.
Sharma said the stock market always gives better returns as compared to economies. India always had the largest chunk of companies that boast of 15% growth and earnings per year, he said.
Looking at where India stands currently, “30-40 companies will always perform well in India”. He recommended “staying invested for three-five years in such companies”.
The Modi government came into power mainly “riding on India’s growth story”. However, there is still a need to take bigger steps for growth, which currently has been overestimated, he said.
“Growth has been overestimated and inflation has been underestimated. I don’t agree with the changing methodology for calculating growth. India’s 7% growth rate has been overestimated,” the renowned investment banker said.
The impact of US President Trump is extremely limited on markets as a big market like the US does not need many reforms.
But on the domestic front, there is a need for reforms as India is still a developing nation. Despite measures like demonetization, goods and services tax, proposing privatisation of banks, divestment of PSUs, “the dramatic drive for privatisation is missing”, said Sharma.
He does not believe PSUs will ever get privatised in India owing to frugal “political appetite” even though India has the highest share of public-sector banks in the system.
“The scope for big-bang reforms seems less in India,” he said.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Ruchir Sharma")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}