The May investment report of Credit Suisse has come as a breath of fresh air and hope for the beleaguered markets that have fallen approximately 15 percent from their all-time highs in October 2021. Amid this fall, led by tighter monetary policy globally after the COVID-19 pandemic waned and the Russia-Ukraine war put pressure on crude oil and global supply chains, the question looms if there is more pain in store.

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The Credit Suisse report reiterates its overweight call on equities globally, saying that there is extreme investor pessimism and their base case is not for the US or a global recession. The firm is also bullish on a China recovery. So where does all this leave India, which has seen relentless foreign investor selling?

“It is very difficult to call exactly a bottom because nobody can predict that. But I think we are very close to that, given the 20 percent sell-off in the US equity market this year itself,” Suresh Tantia, Senior Investment Strategist at Credit Suisse, told CNBC-TV18.

One year Nifty50 chart, which shows the recent crash

Whenever equity markets go through this regime shift from very low-interest rates to higher interest rates, normally, one sees this kind of pullback in the market, he added.

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In terms of portfolio, if one looks at the emerging market fund managers, they have a structural overweight position on the Indian equity market, said Tantia

On earnings growth, Tantia said, “The attractiveness of the Indian equity market is a growth story. Because everybody understands that the Indian economy can grow at 8-9 percent in nominal terms double-digit. And that's going to produce double-digit earnings growth for the next few years,” he explained.

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A point that will sport the Inda growth story is the shift from an unorganised sector to an organised sector.

"I think investors, especially foreign investors, look at India as a more structured growth story for the long term where you have a lot of good themes in consumption, IT, and new economy sectors,” said Tantia.

For the full interview, watch the accompanying video

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(Edited by : Abhishek Jha)

First Published:May 25, 2022 1:25 PM IST