Stock market valuation at risk level: HSBC

MUMBAI: The country's stock markets are now at risk levels after rising sharply from their lows in March 2020, HSBC said at a conference on Asian Outlook for the last six months of 2021.

It has maintained a neutral rating on Indian equities, but foreign direct investment (FDI) inflows are expected to pick up as the country's economy recovers. Any reduction in FDI would be temporary.

The latest economic package announced by the Government of India is moderately positive. Given India's tight economic situation, the package is not a big deal.

Given the pace of vaccination, the country should have herd immunity in the first six months of 203, said Frederick Neyman, co-head of Asian Economic Research at HSBC.

Emerging markets have maintained a healthy flow in the last financial year as most of the central banks have maintained flexible monetary policy to revive the economy. In FY21, foreign institutional investors poured Rs 4.5 trillion into the Indian capital market, the highest since Rs 1.50 trillion in FY18.

Investors are looking at India as an alternative to China, said Harold van der Linde, head of equity strategy for Asia Pacific at HSBC. However, the valuation of Indian stock markets is currently proving costly. The third wave of Corona is still dangerous for India.


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