New Delhi: Christopher Wood, Global Equity Strategist at Jefferies, in an interaction stated that India was the most exciting investment story right now with the government’s push for China plus one being icing on the cake. Wood added that India’s markets were an exception since nowhere else in the world are smallcaps and midcaps outperforming largecaps.
Chris Wood on AI
Talking about artificial intelligence (AI), Wood said it was better to learn a plumber’s trade than to train to become a programmer, He took the hyperbole route to elaborate on the swift manner in which the landscape may change in the IT sector with AI in the mix. He said NVIDIA’s stock surge underlined the importance of AI, and he had seen that Taiwan was pushing for devices designed for AI, called AI Edge.
What Wood said about Indian equities
According to Wood, the Indian market is an exception since smallcapss and midcaps are outpacing largecaps here. He added that markets will be sensitive to any changes in capital markets rules in Budget 2024. This will be higher than the fluctuations seen after the Lok Sabha poll verdict, he said.
On the matter of whether Indian valuations are pricey, Wood said the excessive valuations were driven by strong growth in earnings. India remains the great domestic demand story with an emerging equity culture, with growing retail participation. It is the best long-term equity market in the world, added Wood. Surprised by the resilience of the market after the shocker election result, said Wood.
Parallels with US retail participation
Wood said that the US markets witnessed a jump in retail participation in the 1980s which started a bull run sustained until the 2000s. India was set for a similar bull run with the rise in retail participation, he said, adding that globally it is better for markets when domestic capital fuels their growth.
However, the government should encourage this trend by promoting long-term investments and easing capital gains tax, Wood added. He said he was bullish on the following sectors:
Defence
Property
Energy
Infrastructure
Contract manufacturing
Energy is the only way to hedge against global geopolitical conflict in the long term, said Wood.
What Wood said on rate cuts
Wood expects the US Federal Reserve Fed to cut rates after September 2024. He said the Asian central banks were waiting for the US Fed to slash rates. While India was well placed to slash rates, the global wait is characterised by a strategy to protect domestic currencies, said Wood in an interaction with CNBCTV18.
What happens if Trump wins
Wood forecasts an end to the Russia-Ukraine War if Donald Trump returns as President of the US. However, this is likely to lead to an oil sell-off, and a reva,p in oil drilling in the US, he said.
This will be beneficial for India given the prospect of lower energy prices, he added. However, Trump’s return may not be good for the US dollar and markets, he said, citing the larger fiscal profligacy in the US economy that both the Demcrats and Republicans are shying away from addressing.
Jefferies CEO Chris Wood said he was bullish on the Indian economy as well as the long-term returns forecasted for Indian markets. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
