“…there is potential for index EPS upgrades. The surprises are yet to be on the upside. It would be unwise to bet against the market,” said Mishra in an interaction with ET. “…our bet is that the expectations around which the market is anchored currently will be upgraded in the next year or so, and therefore the market should have upside,” said Mishra.
Indian markets are up over 80 per cent from their March lows and cruising at record high levels on news of vaccine development to treat the coronavirus and easy money policies of global central banks. Since November, indices have gained 18 per cent amid record FPI flows.
Mishra said that uncertainty surrounding vaccine development and US Presidential elections has been sorted out which have helped flows come to India but expectations surrounding the economy have also gone up as momentum has persisted after the festival season.
Mishra said the market direction is not going to be a straight line up kind of a move. “I don’t think it is going to be a straight line… a lot of the movement we are seeing in Indian equities is happening globally as well… If there is global market volatility, it will show up in India also,” he said.
Mishra said he does not expect a large stimulus to be announced in the Budget.
“Prediction on whether the government will give a stimulus is harder to make. When I see the intervention so far, the government has relied on a more calibrated approach than a big bang stimulus….. My expectation is not for a big bang stimulus in the budget, to expect a very large stimulus is something that doesn’t sound like a sound expectation,” said Mishra.
