Economy and Markets
Prashant Khemka, Co-CEO CIO - Active Equity at Goldman Sachs
Source: CNBC
RBI easing to be a tailwind for market next year
We have constructive view on the Indian market at this point in time. The Reserve Bank of India easing will be a tailwind for market next year. Government's recent actions aiding investment sentiment. The market performance will depend on how macro unfolds. If you look back over the last two years, there are three factors that have most prominently impacted the Indian markets; the inflationary environment and related policy actions, the ongoing European turmoil and the lack of an enabling policy environment.
Corporate earnings will bounce back once macros improve. The market will also keep a keen eye on the political developments in the country.
What we have seen over the last two months or even from a longer-term perspective over the last two years, these three factors have varied in terms of degree of importance. So, inflation was a primary concern, sometimes a policy action was the primary concern, but at this point in time and over the last two months if you see- inflation and related policy action seems to become more and more of a rare view mirrored problem.
A lot will depend on how the macro continues to unfold. The global sentiment is far better than it was even a few months ago towards India. A lot of the negative developments did eventually make into the general media abroad as well earlier this year. Particularly some of the tax proposals were very negatively taken. Since then, over the last couple of months, those issues having being largely addressed have improved the sentiment to a great extent towards India. It is nowhere near a positive or a euphoric kind of sentiment, but it is much better than what it was at the bottom.
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