The Reserve Bank of India (RBI), which has since May raised the short-term lending rate (repo) by 140 basis points (bps), may again go for a 50-bps increase following global cues, says Nirmal Jain, Founder & Chairman, IIFL.
The Central bank had raised the repo rate by 40 bps in May and 50 bps each in June and August. The present rate is 5.4 per cent.The decision of the MPC would be announced on September 30.
“I don't think that one can live in a completely worry-free world that India is a sweet spot. Yes, India is doing better, if the investment is not going to flow to China and Russia, then by default India will have an advantage. However, the volatility in the currency and the global markets will definitely impact India,” says Jain in an exclusive conversation with Udayan Mukherjee, Global Business Editor, Business Today TV.
The market expert further noted that short-term volatility will be there in the Indian equity markets. However, once the US inflation starts heading down, then India will be a big beneficiary as the world is looking for an alternative to China. Moreover, in India, the economic reforms which the government has been undertaking will also benefit the foreign investor sentiment.
Sharing the investment Mantra, Jain said, “I would say that one should make a balanced portfolio. I mean that's the best thing to do.” Jain is optimistic about different sectors including IT, banking, capital goods, and manufacturing as the government is aggressively investing in infrastructure.
At least at this point in time, the good thing about the Indian market is that one can really have a widespread diversified portfolio because there are opportunities in many sectors. Jain further recommended that one should invest 40 to 60 per cent of their portfolio in equities and the remaining in fixed income instruments. The cement sector also has the potential to do well and it is the right time to invest in cyclical stocks as well, the market maven noted.
Here is the link -https://youtu.be/GCRtAaz41KM
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