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The risk of growth in India may originate from the possibility of US recession, which can occur at the end of 2022 or early 2023, felt v k vijayakumar, head of investment strategy in geojit financial services.
“The US recession that occurs along with the slowdown in China and Europe can achieve global trade and thus Indian exports. But this, if it happens completely, is likely to affect India’s growth only in FY23. In FY22, 7.2 percent of appearance The growth of GDP GDP can only be achieved, “he told MoneyControl in an interview.
Vijayakumar, who is a sharp financial market observer and has written four books about the economy, the worst trust for INR seems to have ended. “The importance factors are buyers who change FII and sharp correction in commodity prices, especially raw ones,” he said. Edit quotes:
Are you looking at the risk of the estimated growth of India for FY23 and FY24 because Morgan Stanley has just reduced the estimated growth to 7.2 percent and 6.4 percent? Even Ficci has reduced the estimated growth of India’s FY23 to 7 percent about the global crisis and inflation problems?
The Indian economy shows major resilience and important main indicators such as credit growth, demand for 2 -wheeled vehicles, passenger vehicles and power plants reflect strong rebounds in the economy. The risk of growth may originate from the possibility of US recession, which may occur at the end of 2022 or early 2023. US recession that occurs along with the ongoing slowdown in China and Europe can achieve global trade and thus Indian exports.
But this, if it happens completely, is likely to affect India’s growth only in FY23. In FY22, GDP growth 7.2 percent looks can be achieved. It is important to appreciate the fact that India’s growth projection for FY22 (World Bank) is 7.5 percent while for other BRICS economies, it is 4.5 percent for China, 2.1 percent for South Africa, 1. 5 percent for Brazil and – – – – – 8.9 percent for Russia. It is clear where the company’s growth and income will come from.
With a significant depreciation, do you think the worst for Indian rupees is over now?
The worst for INR seems to have ended. The significant factors are buyers who change FII and sharp correction in commodity prices, especially raw ones. Because the dollar index drifted down from its peak above 109, FII could not possibly sell significantly and could even continue to buy as they had done for the past few days. This will support Rupee. But in the short term further declining to RS 81 to the dollar may occur, but not outside of it. RBI has enough ammunition to maintain rupees.
Do you think the current recovery in the equity market from a new 52-week new is temporary or will we come out?
In the near future, it seems, we have come out. The 10 percent pull of the lowest position in June is very impressive.
Finance and IT, which bears the burden of FII sales, are considered attractive and therefore, can be expected to support the market. While Largecap is experiencing margin pressure, Midcap seems to be tougher, running with the results of Q1.
Do you expect the US federal reserve to raise interest rates by 75 or 100 bps at the July Policy Meeting? Also, what do you expect from Powell’s comments?
We expect an increase in interest rates of 75 bps by The Fed. Comments will continue to be Ultra-Hawkish until inflation starts down. This is already known and discounted by the market. But, an increase in the level of 100 bps, if that happens, maybe short -term dampers.
Do you think the worst related to the global economic environment has been discounted in the current IT space? Is this the right time to bet in this sector?
Hard to predict now. If the possibility of US recession turns out to be severe, technology expenditure by US companies will be affected. But there are no signs now. Going with the top IT management comments, there is no declining demand signal.
If The Fed succeeds in manipulating the gentle landing of the US economy, the Indian IT segment will bring back the smart ones. This will happen when the soft landing signal is visible.
At present, the US economy is strong; Unemployment is at a very low level of 3.6 percent and good company revenue. Slowdown can not be avoided; But our basic case is that the Fed will succeed in engineering soft landing.
Are you still a buyer in a car room that has collected more than 30 percent in the last four months?
The car segment will grow on an ongoing basis for several years. Requests are very impressive in commercial vehicles, passenger vehicles, upper class 2 wheels and exports in several cases. Because the assessment has been running too fast, there may be a pause. But long -term investors can remain invested and even buy in decline, especially in companies that invest in transitions into electric vehicles.
Setting: Investment views and tips expressed by investment experts at moneycontrol.com are their own and not from the website or management. Moneycontrol.com advises users to check with certified experts before making any investment decision.
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