Jhunjhunwala, who entered the market at the peal of a ferocious bull market in Indian stocks in 1991-92 before it came crashing down, said he doesn’t see the scope for a similar correction in the near term.
The 1992 bull market is considered to be the most ferocious in Indian capital market history, but it petered away as quickly as it had started due to the Harshad Mehta scam that shook up the India’s financial markets to its core.
“Majority of India is questioning (this market), and not participating… I only see doubts even as the market is at all-time high. There is no celebration,” the veteran investor said at an event organised by Motilal Oswal Asset Management.
Indian equities have more than doubled after hitting their multi-year lows in March 2020 driven by a tsunami of liquidity unleashed by global central banks, break-the-bank fiscal stimulus from advanced economies and booming corporate profits.
Jhunjhunwala’s quip on doubters stemmed from rising questions among the common investors over the disconnect between the real economy and the stock market. Indian economy contracted over 7 per cent in the previous financial year amid the ravages of the Covid-19 pandemic with millions of Indians losing their jobs and an alarming 90 per cent seeing a drop in their incomes during the year.
However, Jhunjhunwala is convinced the ongoing bull market is nowhere near its peak, as he sees it being the “greatest bull market India has ever seen.”
Often referred to as India’s own Warren Buffett, Jhunjhunwala claimed the 2020s could belong to India, just the way the 1920s belonged to the US economy. However, he does see risks on the horizon.
The ace investor said the biggest risk to the global equity rally could surface from an escalation in geopolitical conflict between China and Taiwan, as it could be the biggest geopolitical event in the next 20 years.
“I am not defensive at all at this moment,” Jhunjhunwala said.
