Indian stock market latest news today: Amid high volatility in the key benchmark indices of Dalal Street, market observers are busy betting on a trend reversal and the possible triggers that could bring the bull run back to the Indian stock market.
Christopher Wood, Head of Equity Research at Jefferies, believes a trigger for the trend reversal in the Indian stock market was earlier in the South Korean KOSPI and the Taiwan stock market. However, that has now shifted towards the US, and advised Indian stock investors to remain vigilant.
Why is the Indian stock market under pressure?
In an exclusive conversation with The BroadView, Chris Wood of Jefferies said, “Earlier, the foreign money was flowing from the Indian stock market to the South Korean KOSPI and Taiwan’s TAIEX index. Now, when the AI buzz has fizzled out, the money from these Asian markets are moving towards the US Treasuries.”
Chris Wood of Jefferies said that the AI theme has stopped working and people are waiting for a complete AI blowout. This will bring FIIs and FPIs back to emerging markets, including India’s Dalal Street.
Pointing to the AI buzz, which fueled FII outflows from the Indian stock market, Chris Wood said, “Foreign investors flew from India, not because they hated India, but due to the healthy returns looking possible in South Korea.”
The Jefferies expert said that before the AI growth story kicked in, India was the best structural growth story in global equities.
Where’s the hope for the Indian stock market?
Pointing towards the hope for the Indian stock market, Chris Wood said, “That structural growth story in India still exists, and foreign investors are expected to come back when the AI blows out completely.” However, the expert didn’t provide a timeline for the AI blowout.
If the foreign money that flowed from Indian equities to the South Korean and Taiwanese markets is now moving into US bonds, how would it come back to India?
Chris Wood of Jefferies has already replied to this query on various platforms, saying, “Soaring US Treasury yields would exacerbate the US debt crisis, and the US administration would be forced to fix or cap US bond yields. This would weaken the US dollar (USD).”
Hint: Indian stock investors need to catch
The Head of Equity Research at Jefferies added, “The evidence of Treasury Secretary Scott Bessent trying to manipulate the US bond yields between 5% to 6% are already visible. If the US bond yield fails to succumb to this manipulation, then the US government would try to fix the US Treasury yields.”
Chris Wood Jefferies India portfolio
Chris Wood believes that the small-cap and mid-cap themes are expected to continue in the Indian stock market, but he is slightly overweight on the Indian banks.
Replying to this query of BroadView, Chris Wood said, “I believe the RBI may reduce tightening by 50 bps in the next two months.”
Batting in favour of the NBFC stocks instead of pure banking stocks, Chris Wood of Jefferies told the BroadView, “In India, NBFCs are more entrepreneurial than banks, because bank employees’ salary is regulated by the government, whereas in the case of NBFCs, an employee’s salary is linked to its performance.”
Here is the full list of stocks in Chris Wood’s Jefferies portfolio for the long-term:
Bharat Electronics Ltd, ICICI Bank, Axis Bank, Tata Motors, Adani Energy, Adani Energy Solutions, Birla Corp, HDFC Life, Jindal Steel & Power, JSW Steel, Eternal, KCG Rehab, Blue Star, Bajaj Finance, Tata Capital, Cholamandalam, Shanti Gold, Ventive Hospitality (IndiGo), Indian Hotels Company, Max Healthcare Institute, TVS Motor, Mahindra & Mahindra, MCX, and LAurus Labs.
Of these 22 Jefferies portfolio stocks for the long term, Chris Wood has allocated 6% each to BEL, ICICI Bank, and Axis Bank. He has allocated 5% each to Tata Motors, Adani Energy, Adani Energy Solutions, Birla Corp, HDFC Life, Jindal Steel & Power, JSW Steel, and Eternal. The Jefferies expert has allocated 4% each to the next 11 stocks, which are included in the long-term India portfolio.
Disclaimer: This story is for educational and informational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified financial experts before making any investment decisions.
