Embracing India’s Growth Story with Equity Investments
India’s growth narrative continues to surpass expectations, propelling it onto the global stage. Though benchmark indices Nifty 50 and Sensex had a minor setback due to the sentiments of global markets, the broader markets performed well. Indicators in favour of India’s growth narrative:• Inflation within tolerance level: Though temporarily inflation may inch higher due to high food prices such as tomatoes and cereals, the average is still likely to be within RBI’s target range.
• Strong Flows: While FIIs were net buyers to the tune of Rs 13,922.01 crore in the month of July, till date as of Aug 9th, they have sold shares worth Rs 4,804.47 crore. However, DIIs have supported the domestic markets and have bought shares worth a net Rs 4,149.49 crore. Even though FIIs can be quite volatile, India’s enduring economic resilience and policy stability in contrast to other EMs will continue to remain robust, thereby attracting FII flows in the medium term.
• Services growth: Indian Services PMI experienced a remarkable upswing, reaching a 13-year high in July.
• Decreasing Unemployment: Unemployment rate decreased to 7.95% in July, down from the June figure of 8.45%, due to the increased demand in agricultural sectors after the good progress in monsoon.
• Growing GST collection: The government GST collection continues to be robust in July, surpassing Rs 1.65 trillion mark, 11% higher as compared to the same period last year.
Take advantage by investing in a diversified portfolio of equity investments and gold, particularly within India’s current economic climate where growth is on an ascendant trajectory.
Diversified Equity Portfolio: A mix of Value and Growth
Equity market tends to go through cycles. While Value investing tends to invest in matured companies that offer relative stability, growth style invests in companies that are geared for growth sooner rather than later. By investing in a mix of value and growth style of investing, you can have the potential to generate risk adjusted returns over the long term.
Gold: A Path to Financial Freedom
Incorporating gold into your investment portfolio can augment its resilience and contribute to long-term stability, fortifying your portfolio. Gold generally has a negative correlation with equities and helps safeguard your portfolio from the equity market stress during uncertain times.
Key Takeaways
- We believe Fitch’s downgrade of US rating would have only a limited impact on India’s real economy.
- India’s capacity to withstand such challenges stands as a testament to its unwavering economic framework.
- Be a part of India’s unwavering trajectory and make your way towards sustainable growth
(Chirag Mehta is CIO of Quantum Mutual Fund)
