Indians are getting richer, Indian equities are next-in-line

Nifty and Sensex ended the week up by 2.65% and 2.84% respectively.

The recent credit Suisse publication – Global Wealth Report 2019 reflects total wealth grew at an annual rate exceeding 10%. Wealth increased significantly in every region of the world. Emerging market economies, especially China and India, did not simply benefit from this growth but featured as a key driver to the overall uptick

One key takeaway would be that while the wealth in most nations has been expanding, there seems to be a systemic fracture posing to be a hurdle in overall economic progress and hence the synchronised global slowdown today.

In other news, here is the week at glance:

  • The Federal Reserve cut its benchmark rate by 0.25%, a move that was widely expected & priced-in by futures markets.
    The statement may reflect a central bank that will be less willing to cut interest rates in the coming quarters after it removed the phrase that the Fed “will act as appropriate to sustain the economic expansion” and replaced it with less forceful language suggesting a wait-and-watch approach.
  • India to spend $100 bn on energy infra, says PM Modi inviting Saudi investment
    India is expected to invest a massive $100 billion in oil and gas infrastructure to meet energy needs of an economy that is being targeted to nearly double in five years, Prime Minister Narendra Modi said on October 29 as he sought investment from oil kingpin Saudi Arabia and other nations to boost supplies. Speaking at Saudi Arabia’s annual investment forum, also known as ‘Davos in the desert’, Modi promised stable, predictable and transparent policy regime to catalyse foreign investments.

Stock of The Week

Fund alerts:

Aditya Birla Sun Life Mutual Fund has decided to change the benchmark of the Aditya Birla Sun Life Equity Fund from S&P BSE 200 TRI to S&P BSE All Cap Index TRI.

Bottom line:

Earnings season, so far, have been slightly better than analyst expectations with major banks showing improvement in asset quality and fall in slippages, auto and technology companies’ improved earnings were partially backed by corporate tax reduction indicating a systemic recovery in second half FY20.
Though major indices may seem to lend a perception of Indian equities hitting the peak; however, the reality is far from it. We recognise immense valuation-based opportunities in Indian equities – especially in stocks beyond NIFTY15.
Investors deploying capital into large-cap-oriented & multi-cap funds through a Systematic Investment/Transfer Plan can be expected to benefit the most from the structural recovery underway.

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