Indian Market Remains Only Game In Town For Emerging Markets, Says Arvind Sanger
Sanger suggested that think the economy is on the solid footing and will get a normal September quarter.
The Indian market stands out as the premier opportunity among emerging markets, Arvind Sanger, Managing Partner at Geosphere Capital, told NDTV Profit. Despite global market turbulence, Sanger emphasised that India remains resilient and the economy is on a solid footing.
Looking ahead, Sanger anticipates the upcoming week to be pivotal for US equity markets. He expects the Federal Reserve to offer guidance on potential rate cuts, which could significantly influence market movements. With inflation trending downwards and the risk of recession diminishing, Sanger is keenly watching for any indications of the Fed's strategy at their September meeting.
On the investment approach, Sanger suggested that while a rate cut could lead to initial profit-taking, the overall market direction would likely remain positive if economic conditions remained stable.
Looking towards the Indian market and the earnings season, Sanger expressed cautious optimism. "In terms of earnings, it was not so good, but it does not change the long term story, we will have to wait and watch... now that the election is behind us, I think the economy is on a solid footing and will get a normal September quarter. I think the biggest problem for the Indian market remains valuation versus growth," he stated, adding, "Indian market remains the only game in town for emerging markets."
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Regarding geopolitical risks, Sanger was concerned about potential escalations in the Middle East. "I am not optimistic about a ceasefire for countries that are trying to bring the ceasefire, but I think the big risk is if things get out of control...if Iran does something and Israel retaliates...then it could cause energy stock prices to spike and market could take a hit."
However, he was hopeful the situation would not spill over, and significantly disrupt market stability.
Sanger's investment outlook included a continued focus on high-quality players like HDFC Bank and mid-cap NBFCs in India. He described HDFC Bank as a high-quality investment with dislocated valuations that made it particularly attractive in the current climate.
He also had favorable view of the real estate markets in NCR and Mumbai compared to Bengaluru. Citing their solid recovery and high-quality investment opportunities, Sanger noted that the real estate markets in NCR and Mumbai were more appealing than Bengaluru.
