Kotak AMC’s Nilesh Shah on Monday advised domestic investors to avoid investing in gold. In a conversation with ET Now he said, “India equities provide better returns than gold”. Talking about India prospects he said, “there are misconceptions about India in the outside world. It is not appropriate for foreign investors to say India does not have open currency. We are at a stage where our markets will be able to outperform global markets.”
Meanwhile, Gold prices hit a five-month high on Monday as the dollar weakened with investors taking refuge in safe-haven assets in the wake of rising geopolitical tensions over North Korea. Also, Indian markets are on a sustained rally, supported by heavy buying from foreign investors, BJP’s recent landslide win in UP state elections and expected revival in corporate earnings.
Experts say that the foreign investors, who were cautious on investing in India since the demonetisation and the US President election results in November, have turned around and are putting in money into Indian equities on the back of the resilient economy and strong domestic fundamental factors.
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Several analysts and market participants, including firms such as Goldman Sachs, Morgan Stanley, predict a strong revival in companies’ earnings in the current financial year and the next. While Goldman Sachs has upped its estimate for corporate earnings growth to 15% for the current financial year 2017-18, Morgan Stanley recently raised its growth estimate for the next year 2018-19 to 24%.
Further, experts also suggest that despite being at such high levels, Indian stock markets still offer lots of investment opportunities for those who might have missed the rally so far, with plenty of potential upside.