February 18, 2024
Indian Market Shows Resilience Despite February Slump
Finance Stock Markets

Indian Market Shows Resilience Despite February Slump

Indian Market Shows Resilience Despite February Slump

Indian Market Shows Resilience Despite February Slump

The Indian market has faced a decline of around 0.3 percent in February due to the absence of cues following the Interim Budget and the RBI’s expected decision to maintain rates. Chris Wood, in his Greed and Fear report, commends Indian Prime Minister Narendra Modi’s budget announcement, noting its lack of populist measures and increased government capex. The report highlights the fiscal deficit’s projected decline from 5.8 percent to 5.1 percent in FY25, contrary to market expectations. The focus on infrastructure investments over transfer payments is a positive aspect of Modi’s government.


Greed and Fear Portfolio Adjustments Post-Budget

The Greed and Fear report reveals changes in its India long-only portfolio and global long-only portfolio. Investments in Bharti Airtel will be introduced with a 3 percent weight, offset by reductions in Reliance Industries and HDFC Bank. The report emphasizes the government’s “value creation” focus in public sector companies, prompting attention to State-Owned Enterprises (SOEs). Greed and Fear advocates for investors to explore the cheaper segment of the Indian market represented by SOEs.


Global Market Insights and Predictions by Greed and Fear

The report delves into global market insights, indicating that the top five stocks in the S&P500 are valued at 3.4x the entire Russell 2000 market capitalization. It underscores the potential for small caps to outperform if the consensus of a US soft landing is accurate. Greed and Fear’s base case suggests that Japan’s stock market is best positioned for those anticipating a US soft landing. The report predicts a higher likelihood of the Bank of Japan ending negative rates in its March meeting and discusses the potential impact of European parliamentary elections on the ECB’s rate-cutting approach.

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