The strength of India’s economy can be seen in its equity and currency markets, as the correction in Indian benchmarks and the rupee has been quite small compared to other emerging market economies, he said in a statement. note.
“Looking closer at the sales by foreign investors, one can see that much of it is in the large-cap space and not in the mid- or small-cap space,” ANI said quoting the note.
Currently, Western economies are experiencing high volatility, with high energy prices posing challenges to growth.
Bucking the global trend, India’s latest GDP data, he said, reflects a resilient and robust economy compared to any of the peer economies in the emerging market space.
“Although selling by foreign investors has been present in all emerging markets, the extent to which the currency has depreciated is also relatively less in the case of the domestic economy.”
However, a significant challenge for markets in the immediate term, he said, is rising interest rates.
“This (monetary) policy aims to contain inflationary pressures, which can rob the economy of its efficiency and impede growth by negatively affecting consumer demand. Rising rates lead to an increase in the cost of funds and can be a drag for businesses that have huge outlays on capital expenditures,” the financial services firm said.
Additionally, he said the country’s shift to festival season would help promote demand and consumption. Consumer discretionary is one area that may be able to perform better and consumption in the fashion and apparel sector may look good with better earnings prospects.
“The manufacturing sector is expected to perform well in light of business spending and various government initiatives like PLI, and also due to the opportunities presented by China plus one, and the main beneficiaries are likely to be automobiles, automotive auxiliaries, manufacturing companies. engineering and specialty chemicals,” he added.
Finally, the note indicates that now is the time to focus on companies that have strong balance sheets, leading positions in the respective businesses and demonstrated persistent growth, as these companies will have greater stability even in the face of adverse conditions. .
India recently overtook Britain to become the world’s fifth largest economy and, according to IMF projections, only the United States, China, Japan and Germany are now ahead of India in terms of size of the national economy. The lead was taken in the last three months of 2021 and extended into the first quarter of 2022. India has gained six positions over the past decade. Only a decade ago, it was in eleventh position while the United Kingdom was in fifth place.
It has also increased its share of global GDP by nearly one percentage point since 2014, when it was the world’s 10th largest economy. India’s share of global GDP is now 3.5% compared to 2.6% in 2014.
According to some projections, by 2027 it will increase further by up to 4%, surpassing that of Germany.
(With contributions from the agency)
