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Amid the earnings season, even as most Nifty heavyweights report better than expected numbers, Ashok Wadhwa of Ambit Capital says that investor confidence on India’s stock market is riding high. In an interview to CNBC TV18, Ashok Wadhwa. Group Chief Executive Officer at Ambit Capital said, “Investor confidence in India is obviously high, reflected by the quality of investors who are attending the conference. Investors are very keen to know more about India.” In the same interview, the expert said that Indian markets have a lot of liquidity from the domestic investors. “A pull-back from the FIIs should not cause too much worry, as we have enough and more liquidity domestically, with all the structural changes that have happened. We have seen that when FIIs get silent, DIIs step in more aggressively. But, we cannot ignore the fact there there has been caution coming in from FIIs,” he told the channel.
In fact, many experts have pointed out that India is going through a liquidity driven rally. Kalpana Morparia, the Chief Executive Officer of South Asia and India Operations at JPMorgan Chase said in September, “ There is this wall of liquidity coming in. You’ve seen the kind of inflows we received in the mutual fund industry, I’ve not seen this in the last 42 years.” Earlier this week, In an interview to BTVi, Harsha Upadhyaya, Head – Equity investments for Kotak Mutual Fund, said that strong earnings will be necessary to sustain the rally.
Many market experts had cautioned that the markets may see a correction, if earnings don’t pick up in the current quarter. Sandip Sabharwal, an investment advisor told ET Now, that the equity benchmark indices may correct in the range of 200-400 points, adding that a deeper correction may be unlikely. On the other hand, Teresa Barger, the co-founder and CEO of Cartica Management which manages more than $3.2 billion concurred that India is going through a quality rally. “ You had EPS growth, at least in the companies we like. This is a quality kind of rally. So, as longer-term investors we are not concerned about the hiccups,” Teresa Barger told CNBC TV18.