The Indian stock market has been volatile of late. The benchmark indices have shed all their 2017 gains in the current calendar year. As we head into another result season, the long-term view remains positive. However, gains during the current year may be muted compared to the previous year, Shyamsundar Bhat, Chief Investment Officer of Exide Life Insurance, told Moneycontrol in an interview.
Edited excerpts:
The possibility of long-term trade wars between the US, China and other developed nations has spooked sentiment worldwide. How does it impact Indian companies?
Potential trade-wars, particularly between the US and China, indicated by announcements from both countries, have added to global market volatility over the past few weeks. While the US proposes to impose tariffs on imported steel, aluminium, etc, China proposes to impose tariffs on agricultural and specific food products; aircraft; vehicles; etc. Since most of the job losses in manufacturing have been due to growth in productivity and automation rather than trade, trade-protectionism is unlikely to help in job creation. There might not be as much of a reduction in US trade deficit in goods as imports from other countries might increase due to either lack of, or expensive, manufacturing capacity in the US. It could also result in an increase in inflation in both countries. US companies have invested significantly in China in manufacturing and supply-chain, and moving these out of China would be very expensive.
