Is It The Right Time To Buy Stocks?

The new government has also fixed the supply side of the economy. Furthermore the fort priority for the government right from the beginning was tackling inflation and it has taken several measures over this regard. The Budget has brought growth back in focus with meaningful push given to infrastructure, manufacturing and real estate.

As the next step towards economic growth the government has thought of opening up foreign direct investment in insurance and defense and, of late, moving towards reforming the labour laws. India is now waiting the next generation of reforms and this is possibly going to happen in the next five years.

Emerging markets as an asset class is coming back in favour. Within EMs, India is balanced favorably given the very strong and pro-reform central government. All these factors suggest that India is about to embark on its next growth cycle, which is going to be well-founded on supply-side reforms, stable and contained inflation and favourable global macroeconomic environment.

As a result Indian economy will be well supported by both the engines of demand– domestic and exports. Such an environment promises well for earnings and valuations. One should not be surprised if the earnings trajectory moves to 20-25 per cent range from nearly 10 per cent seen in the past two-three years.

In the near-term, the markets might be a bit volatile and range-bound, given the absence of immediate triggers and development of some uncertainties on the international front. Hence buying equities can be a better option.