CLSA's chief equity strategist Christopher Wood says Indian stocks have the potential to once again become the favourite among Asian markets, if the investment cycle picks up in the country. But for now, "the Indian story is not great investment story until we have the hard evidence of an investment cycle pick-up. If the investment cycle picks up, it could become the best equity story in Asia," he said.
CLSA's chief equity strategist Christopher Wood says Indian stocks have the potential to once again become the favourite among Asian markets, if the investment cycle picks up in the country. But for now, "the Indian story is not great investment story until we have the hard evidence of an investment cycle pick-up. If the investment cycle picks up, it could become the best equity story in Asia," he said.
India's economic growth has slowed down sharply in recent years, marked by a sharp slowdown in investment.
"In my view, India was the best equity market investment in Asia during 2002-09. Since then investment cycle has been coming off," Mr Wood said.
To kick start the investment cycle, the government has focused on clearing large-ticket projects, sparking some hope of a recovery. Mr Wood said there is no evidence of a pick-up in investment cycle yet.
On rupee, Mr Wood said, the currency remains cheap but inflation remains sticky and rates could rise further.
Forthcoming general election in India next year is going to be the most politically watched event by investors in Asia, Mr Woods said.
"The Indian stock markets are going to be focused on the political development in the next six months. This will lead to a lot of volatility," he said.
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