Speaking at the NSE during Muhurat trading and Deepawali, Shroff said India’s economy remains on solid ground. He expects growth of over 7 per cent, which he said should keep equity markets on a positive path.
Cheaper crude a key support
Shroff pointed to lower crude oil prices as one of the main positives for Indian equities. He said cooler oil prices would give domestic companies a stronger tailwind for growth than they had in the previous Samvat year.
A fall in crude prices could also help the rupee strengthen, he said. A firmer rupee and cheaper imports of oil could, in his view, encourage foreign institutional investors (FIIs) and foreign portfolio investors (FPIs) to return to the Indian market.
Global picture brighter
Shroff also looked beyond India’s borders. He said the outcome of the US elections has already brought more clarity, which should help ease geopolitical tensions around the world.
Such a shift, he argued, could help restore business confidence and reduce sharp swings in the market. He said businesses are likely to perform much better in the new Samvat year than they did in the last one.
Domestic investors carried the market
Shroff said domestic investors have been the backbone of the market over the past two years. Retail investors and domestic institutional investors kept buying even as foreign investors remained net sellers during that period.
He said retail investors had actively supported the market, while FIIs and FPIs were on the selling side. Domestic institutional investors (DIIs) and mutual funds, on the other hand, were buyers.
Despite this, Shroff said he was optimistic about a revival in foreign investor participation. He said that if FIIs and FPIs also start buying, it would be very good news for Indian markets as a whole.
He ended his remarks by wishing all market participants and viewers a prosperous Diwali.