Indian Markets Are Oasis In Global Desert Amid Trade Volatility, Says Prime Securities Group CEO

Indian markets are an oasis in the global desert, amid trade-related volatility as the growth story of the fastest major growing economy continues, said N Jayakumar, managing director and group chief executive officer, Prime Securities. Jayakumar also expects India to strike a deal with the US in the next few weeks.

The trend will likely be that more money from outside comes into emerging markets like India, as it moves out of the US. There has been a decided shift amid a decline in the dollar index, Jayakumar told NDTV Profit.

As soon as US President Donald Trump started imposing tariffs on trade partner countries, the dollar index started to erase gains and fell to a three-year low of 97.92 on April 21.

Jayakumar said people were losing trust in the US government and markets. He expected an earnings downgrade as inflation caught up with tariff-related volatility in the world's largest economy.

Investors were yet to see one full quarter with the tariff-related policies and upheaval, he said. US consumers would end up bearing the brunt of inflation. The downgrade of US treasuries was a matter of serious concern for Americans as they have $36 trillion outstanding debt, he said.

Moody's has downgraded US credit rating to Aa1 from Aaa on Friday, joining Fitch Ratings and S&P Global Ratings.

Indian equity markets have seen Rs 4,136.88 crore inflows from foreign institutional investors in the last one week.

The Indian growth story is playing out. Liquidity was never as much as it is now. The Reserve Bank of India and other regulatory authorities are doing what it takes to improve the ease of doing business. The Securities Exchange Board of India has come up with norms which will allow for greater foreign capital, Jayakumar said.

NSE Nifty 50 and BSE Sensex recovered from a three-day slump in Wednesday's session as private bank stocks were leading. The indices were trading 0.47% and 0.40% higher, respectively.