"The declining trend for US inflation (7.7 percent in October against 8.2 percent in September) looks sustainable now as most commodity prices have cooled off by 10 percent to 20 percent in the last nine months," Amit Jain of Ashika Global Family Office Services says in an interview to Moneycontrol.
After a significant run-up in the market, Amit believes by December 2022, the Nifty will have a new lifetime high, and may also cross 19,000 if the global market supports it. The Indian stock market has already discounted the interest rate risk at the current valuation, says the Co-founder of Ashika Global Family Office Services.
At this level, with over 18 years of experience in the BFSI domain, Jain feels there are some value-buying opportunities in the pharma, IT, and banking sectors. Edited excerpts: With the falling inflation in the US, do you think a major concern is easing and now we don't have to worry, or do we need to watch out for more data?
On Thursday, US inflation numbers at 7.7 percent came in a pleasant surprise for global markets. Both Dow Jones and Nasdaq rallied 3 percent to 6 percent at the index level. Also, the US 10-year G-Sec bond yield fell below 4 percent, which has given a lot of comfort to bulls to take fresh long positions.
This declining trend for US inflation looks sustainable now as most commodity prices have cooled off by 10 percent to 20 percent in the last nine months. Hence, in my view, there is a higher chance that US inflation has already peaked two months back, and now, going forward, each inflation number will have some downtrend.
With the hope of easing concerns of aggressive rate hikes by the US Federal Reserve, do you think the Indian equity markets will rally to surpass 19,000 by December-end?
Yes, there is a very high chance that by December 2022 we will have a new lifetime high for Nifty, which may also cross 19,000 as well if the global market supports it. However, the only assumption for this prediction is neutral geopolitical risk. The Indian stock market has already discounted the interest rate risk at the current valuation.
What are your thoughts on job cuts announced by several service companies in the US? Is it a big worry for the job market?
Any layoffs are always painful for professionals. So, of course, I am not feeling great for those who are laid off, but this may be the beginning of the end for interim problems faced by these US companies, as now they may have much higher productivity per employee, as most of the roles which are laid off were either from support function or from redundant job roles.
These layoffs certainly trigger a wave of concern for IT professionals worldwide.
Do you think the worst of rupee depreciation is behind us now?
Yes, I had been maintaining that stance from the beginning, that rupee will continue to outshine other currencies like GBP, Euro, and Japanese yuan in the short to medium term.
In the last year, the Dollar index has moved from 90 to 115, which reflects the strength of the US dollar rather than the weakness of the rupee. If you observe the rupee's performance against the GBP, Euro, and Yen, then you can say that the rupee has actually appreciated, rather than depreciated in this transitional phase of the global currency reset.
What are your broad expectations from Union Budget 2023, especially ahead of the General Elections in 2024?
Till now all budgets by the ruling government have been extremely pragmatic and focused on the bottom of the pyramid of Indian society.
In my view, this trend will continue even in Union Budget 2023. We may have some further PLI (production-linked incentive) schemes for start-ups and mid-size corporates. Also, we may have some dedicated initiatives for farmers as rural demand continues to lag post-Covid.
What are your thoughts on the corporate earnings season that is ending soon? What do you make of the management commentaries about the future trend?
The results of most corporates have been in line with expectations. Most of the management is bullish on Q3 projections as inflation numbers are consistently coming down every month. Hence, we may see some revival in export-oriented sectors. At this level, we may see some value buying opportunities in pharma, IT, and banking.
After a significant run-up in the market, Amit believes by December 2022, the Nifty will have a new lifetime high, and may also cross 19,000 if the global market supports it. The Indian stock market has already discounted the interest rate risk at the current valuation, says the Co-founder of Ashika Global Family Office Services.
At this level, with over 18 years of experience in the BFSI domain, Jain feels there are some value-buying opportunities in the pharma, IT, and banking sectors. Edited excerpts: With the falling inflation in the US, do you think a major concern is easing and now we don't have to worry, or do we need to watch out for more data?
On Thursday, US inflation numbers at 7.7 percent came in a pleasant surprise for global markets. Both Dow Jones and Nasdaq rallied 3 percent to 6 percent at the index level. Also, the US 10-year G-Sec bond yield fell below 4 percent, which has given a lot of comfort to bulls to take fresh long positions.
This declining trend for US inflation looks sustainable now as most commodity prices have cooled off by 10 percent to 20 percent in the last nine months. Hence, in my view, there is a higher chance that US inflation has already peaked two months back, and now, going forward, each inflation number will have some downtrend.
With the hope of easing concerns of aggressive rate hikes by the US Federal Reserve, do you think the Indian equity markets will rally to surpass 19,000 by December-end?
Yes, there is a very high chance that by December 2022 we will have a new lifetime high for Nifty, which may also cross 19,000 as well if the global market supports it. However, the only assumption for this prediction is neutral geopolitical risk. The Indian stock market has already discounted the interest rate risk at the current valuation.
What are your thoughts on job cuts announced by several service companies in the US? Is it a big worry for the job market?
Any layoffs are always painful for professionals. So, of course, I am not feeling great for those who are laid off, but this may be the beginning of the end for interim problems faced by these US companies, as now they may have much higher productivity per employee, as most of the roles which are laid off were either from support function or from redundant job roles.
These layoffs certainly trigger a wave of concern for IT professionals worldwide.
Do you think the worst of rupee depreciation is behind us now?
Yes, I had been maintaining that stance from the beginning, that rupee will continue to outshine other currencies like GBP, Euro, and Japanese yuan in the short to medium term.
In the last year, the Dollar index has moved from 90 to 115, which reflects the strength of the US dollar rather than the weakness of the rupee. If you observe the rupee's performance against the GBP, Euro, and Yen, then you can say that the rupee has actually appreciated, rather than depreciated in this transitional phase of the global currency reset.
What are your broad expectations from Union Budget 2023, especially ahead of the General Elections in 2024?
Till now all budgets by the ruling government have been extremely pragmatic and focused on the bottom of the pyramid of Indian society.
In my view, this trend will continue even in Union Budget 2023. We may have some further PLI (production-linked incentive) schemes for start-ups and mid-size corporates. Also, we may have some dedicated initiatives for farmers as rural demand continues to lag post-Covid.
What are your thoughts on the corporate earnings season that is ending soon? What do you make of the management commentaries about the future trend?
The results of most corporates have been in line with expectations. Most of the management is bullish on Q3 projections as inflation numbers are consistently coming down every month. Hence, we may see some revival in export-oriented sectors. At this level, we may see some value buying opportunities in pharma, IT, and banking.
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