Daijiworld Media Network - Mumbai
Mumbai, Oct 14: Investors should remain patient and avoid hasty decisions in the stock market, which continues to face global economic and geopolitical uncertainty, says Ridham Desai, Managing Director and Chief Equity Strategist at Morgan Stanley India.
Speaking to NDTV Profit, Desai emphasized, “The stock market will always remain uncertain by nature. Sitting tight and doing nothing is the best way to accumulate wealth.”
After a year of consolidation in domestic equities, Desai highlighted India’s attractiveness as an emerging market relative to China—the most compelling in 25 years. He added that India’s nominal GDP growth of 11-12% is likely to translate into corporate earnings growth of around 15%, providing strong tailwinds for stocks.
Desai credited the Reserve Bank of India and central government for carefully managing inflation during and after the COVID-19 pandemic. “High real interest rates and a benign fiscal deficit by 2024 set the stage for growth,” he said. He noted that current liquidity injections by the RBI and government-led consumption pushes via tax cuts will create reflationary conditions in the economy.
On foreign investment in Indian equities, Desai cited three key challenges: valuation, artificial intelligence, and competition. “Absolute valuations remain a concern for foreign investors. One year ago, China traded at nine times earnings and India at 20 times.
Today, China is at 15 times while India remains at 20 times,” he said.
He also noted that markets heavily influenced by AI trade have seen gains of 20-40% over the past year, whereas India’s market has felt more like a bear market in comparison.
Desai’s message for investors is clear: patience and disciplined investing remain the most reliable strategies amid ongoing market volatility.