Even as Indian markets seem to be on a pause after putting up a spectacular show in this calendar year, perennial bear Marc Faber believes that there may be a correction in the short term. However, the author of “Gloom, Boom & Doom Report’ is still bullish on India in the long term.
“I am still positive about India in the long run. The stock market in US dollars has been one of the best performers this year. We are up over 22 percent though I think in a world where we have these artificially low-interest rates, I think the market is maybe now a bit ahead of itself and may have a correction but the long-term still looks promising,” Marc Faber said in an interview with CNBC-TV18.
He said that although many markets around the globe have given between 17 to 22 per cent returns in the first half of 2017, the current global economic outlook may not allow similar kind of returns in the second half of the year. Marc Faber also said that the Indian market will transform from being an index market to a stock specific market.
“Europe and the US essentially, almost in zero interest rate environment and to have this kind of performance, we have in the first half, from equity markets is an incredible performance. So my view would be that the second half will be more difficult and I wouldn’t be surprised to see the US market going down or the leadership changing,” Marc Faber said.
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“The same will occur in India where maybe the index is not moving much but within the market some stocks will perform well and others not so well. So in other words, it will be in the world in the second half and going forward a stock pickers market and not an index market,” Marc Faber added.
Earlier in April, Marc Faber had said that the outlook for India and emerging markets is far superior to that in the “rotten western democracies”. He had maintained even then that the US markets are very expensive. “The US is a highly-priced market – it’s now 54% of global market capitalisation,” Marc Faber had said then. He said that he would rather continue to invest in Indian markets. “As an investor, I would find ways to invest in India and in emerging markets in general over the next five years, 10 years or 20 years.” he had said, adding, “India is at a low valuation relatively to the US, and it would outperform the US for many years.”