A weak economy would not necessarily result in markets doing badly and a sharp correction in the markets at this time would only be because of global factors, Neelkanth Mishra, managing director, equity research at Credit Suisse, said on Wednesday. Credit Suisse’s “India Market Strategy’ report was released on Wednesday.
Mishra said 25% of the BSE 500 market capitalisation is almost completely driven by global factors, 22% by the local macroeconomic situation, 42% from penetration-driven stories and 11% of market share.
“The markets and the economy are weakly linked, and there are pockets of growth even in this otherwise weak economy, such as high-end discretionary consumption, and beneficiaries of higher financial savings,” Mishra said. However, he cautioned about more corporate earnings downgrades going forward.