Ramesh Damani Stays Positive On Indian Economy, Markets Despite Trump 2.0 Jitters

With the Union Budget around the corner, market veteran Ramesh Damani says it is important to stay attuned to developments in Washington DC as well as Delhi.

Damani pointed to the influence of US policies on global markets, noting that "Trump's policies are encouraging oligarchs to come to power again" and stressing that "America's market, its economy, its size means that we have to pay attention to it."

The experienced investor also emphasised the current US political landscape as a concerning factor. "My feeling is that instead of making a left or a right turn, they are making a U-turn in Washington DC."

Despite concerns emerging in the world's largest economy, Damani made it clear that his outlook on India’s economic future remains positive. "While I'm extremely nervous on the macro developments, I'm not bearish on the Indian economy," he said.

Damani also expressed similar faith in Indian markets. "I am extremely concerned with the direction America is moving in and where it will take the rest of the world," he said, but added, "I think India will perhaps manage to escape because of the domestic economy and China Plus One strategy."

On the market pangs after a prolonged bull run, Damani noted, "Markets corrected to a bad spot, but it is part of historical correction. Can't blame markets for correction because markets are known to do that."

Volatility is the normal beast of the market, the market expert said.

Damani’s optimism was evident when he observed recent market activity. "The reason I feel more optimistic than pessimistic is when I look at the last 30 days when the market has been well within the correction, a lot of the stocks that I have were making lifetime highs, which is extremely rare in the bearish phase of the market. It just means that the market is latching on to the good ideas."

One key segment that Damani remains particularly bullish on is the public sector undertakings. He noted that PSU stocks, which have been leading the market higher in recent years, still offer exciting growth opportunities. In the backdrop of the approaching Budget, Damani suggested that the government’s focus on defense could provide a further boost to these stocks. "That will be proven in the Budget if they increase the capex for defense, and then there will be a whole new leg for some of these stocks," he said.

The corporate governance story is still unfolding for PSU stocks, Damani said, exuding confidence in the improving financial practices and transparency within the sector.