The Nifty regained its all-time high earlier this week and is shooting to new highs. This feat is hardly surprising what with the Indian economy chugging along as the fastest-growing large economy in the world. Yet the new highs come at a time when the Fed, the European Central Bank (ECB), and the Bank of England (BoE) look determined to slow down their respective economies.
NSE
In an interview with CNBC-TV18, Manish Chokhani, Director of ENAM Holdings, emphasized the importance of including India allocation in investment portfolios. Despite India's potential as a lucrative market, Chokhani pointed out that many fund managers are still underweight on India.
He also spoke at length about whether one should be wary of the Nifty climbing at a fast clip from here on, whether are there dangers of a sharp fall later this year because of the global rate hikes, can Indian equities rally or at least outperform even if the world slows and the best sectors and stocks to bet on.
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Talking about India, Chokhani said, “India's PE multiple has just kept going higher every year, almost like a midcap, which you know, is going to emerge as a large cap because pretty much everyone in the world now knows this will become the third largest economy in the world. You must have an India allocation in your portfolios. A lot of people are still underweight in India, a lot of fund managers do not even know where the country is because they were so obsessed with their own countries or indeed only China.”
Including India allocation in a portfolio can provide diversification benefits due to the country's relatively low correlation with other global markets. As a separate economic entity with unique drivers of growth, India can act as a hedge against market volatility and provide stability to a diversified investment strategy.
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Despite its rapid growth, India's stock market still offers attractive valuations compared to many developed economies. Fund managers who are underweight in India may find undervalued opportunities in high-potential sectors, enabling them to generate long-term returns.
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For more details, watch the accompanying video.
First Published:Jun 30, 2023 7:23 PM IST
