Investment Tips: After the huge volatility and correction of the last few months, the market is seeing a boom again. The market has again moved ahead amid continuing concerns on issues like inflation and growth. In this situation, it cannot be said with certainty which news or possibilities the market has digested. But seeing the situation, it can be said that the market has assumed that inflation has come to its peak. Harshad Borawake, Research Head of Mirae Asset Mutual Fund, said this about the market in a conversation with Money Control.
Harshad Borawake said that the Reserve Bank will hike the rate because inflation is currently running above the central bank’s limit of 2 to 6 percent. However, the RBI will take a slightly softer stance than the central banks of other countries. Given the declining commodity prices and a good monsoon, the Reserve Bank will not go for very aggressive rate hikes.
high inflation became a problem
Boravake said that if you look at the current global order, the Russia-Ukraine conflict has caused some pressure on the global supply chain, while higher energy and food prices have resulted in higher inflation.
How long this situation will last, it can only be guessed. But it will have an impact on development. However, unlike the previous slowdown, we believe this will not last long as the balance sheet of the private sector is in good shape. Therefore, once inflation stabilizes, it should be relatively easy to accelerate further growth.
capital goods sector
Responding to questions related to the capital goods sector, he said that the government has continued to spend on infrastructure in the last few years. But compared to that private investment was not enough. Now, as the economy returns to normal and industries show a recovery, private investment will also start coming in. We expect private capital expenditure to come back and the capital goods sector should benefit. Government efforts like PLI (Production Linked Incentive) schemes should also help.
Best option for power sector investment
On the power sector, he said that right now this sector is going through deteriorating for the last several years. Apart from this, concerns related to environment and governance have been creating pressure in this sector. Looking at the recovery of the economy and the beginning of environmental solutions, now this sector is ready to move forward rapidly. The government has also set big targets for this. Therefore, this sector is also very important for investment.
FIRST PUBLISHED : July 31, 2022, 21:20 IST