India Is An Exciting Market For Global Stock Pickers, Says CLSA's Vikash Kumar Jain
There are plenty of liquid options and a wide variety of stocks to choose from in the Indian markets, Jain says.
Over the past six to eight weeks, the markets have been exhibiting a tendency to trade sideways to negative rather than undergoing a sharp fall, which suggests a period of adjustment, according to CLSA's Vikash Kumar Jain.
"There is nothing alarming at this point of time unless there is a macro event that plays out globally, which we are not really able to see at this point of time," Jain, strategist at CLSA, told BQ Prime's Niraj Shah.
India is definitely a stock picker's market, he said. There are plenty of liquid options and a wide variety of stocks to choose from, making it an exciting prospect for global investors, Jain said.
Crude Price Surge
Jain said that an increase in crude oil prices driven by supply concerns is generally unfavourable for the global economy. However, he highlighted that the recent rise in oil prices is not unfavourable. OPEC is trying to control the supply which will allow them to achieve a more respectable crude oil price, he said.
Oil held near its highest levels since November after OPEC+ leaders—Russia and Saudi Arabia—announced that they would extend supply cuts till the year-end.
"I am a longer-term bull on crude prices. I don't believe that we have a much bigger runaway rally immediately for a couple of reasons," Jain said. "If crude prices were to kind of sustain significantly above $90 for a longer period, then Saudi will come back and take back a part of its cut that it has done till December."
Outlook On Banking Sector
Jain is overweight on the banking sector. According to him, the recent strengthening of the U.S. dollar since mid-July has not led to robust inflows into emerging markets. If the dollar stabilises or undergoes a corrective phase, we could potentially witness increased inflows. This shift may result in a greater portion of inflows finding their way into the banking sector.
The Nifty Bank rose over 3% on a year-to-date basis, whereas the Nifty 50 advanced to 7.83%, according to Bloomberg data.
Energy Sector As An Opportunity
Jain is also betting on energy and is overweight on the sector. There are certain parts of the space, which are pretty beaten down and where an investor can find reasonable valuation, he said.
