INSUBCONTINENT EXCLUSIVE:
4 min read Last Updated : Jul 19 2024 | 9:00 AM IST
Despite the rally in equities over the last few years, India, according to
Christopher Wood, global head of equity strategy at Jefferies, is still in early stages of an equity cult.
Any changes to the capital
bigger correction that what the markets witnessed post the Lok Sabha election outcome on June 4 that saw the Bharatiya Janata Party (BJP)
lose majority, though it was able to form the government with the help of coalition partners.
His conviction on the road ahead for the
Indian stock markets stems from the rising participation of retail investors over the years, including in mutual funds, which Wood believes,
The Indian stock market, he said, remains far the most promising asset management story globally, even in the face of loss of majority for
This has served to highlight only further the power of the retail investor phenomenon in the sense that retail investors bought as the
(FY21) to 18.4 per cent at the end of FY24 ended March 2024
the nature of the Indian market has fundamentally changed in terms of the extent to which it has become domestically driven
Wood said.
The Indian stock market is now capitalised at $5.2 trillion, up 296 per cent from the low of $1.3 trillion reached in March
2020, and accounts for 1.96 per cent of MSCI AC World Index, up from 0.93 per cent at the end of March 2020
is not a reason to sell, save from the most short-term or tactical of standpoints
populism
The Budget 2024 on July 23 is to be watched for any signs of populism, Wood said, in order to meet the demands of the two
minority parties in the BJP coalition
than was the case before about a potential increase in the capital gains tax rate
The view is that the re-elected government is unlikely to make such a move because of the reduced mandate
Still if that view turns out to be wrong, and the capital gains tax is increased materially, it will likely trigger a bigger correction than
the long-term stability of the rupee
A stable to rising rupee, Wood said, would certainly only enhance the long-term argument for investing in Indian equities which remain,
first and foremost, a domestic demand-driven story.First Published: Jul 19 2024 | 8:59 AMIST
