Once again on your thoughts, the geographical political tensions and the increase in its influence on its markets, especially Indian markets, because we have seen in the end that the markets are on the wall of anxiety and we have seen many examples in particular in the past two years.
Sunil Subramanian: I think it’s because of the power of domestic liquidity. If you look at the numbers for the mutual fund industry, for example, the flow remains relevant and I think the net flow was below 20,000 last month. But if you see the total flow, it is stable at around 55,000 crores.
Therefore, I think the SIP book, which is about 26,000 crores, means that fund managers have got enough liquidity, but the nature of the liquid is a bit more tilt towards the middle and small APPs, which is why you look when you are global programs, especially because they are spiking. This strengthens this is the fact that the domestic economy is pulling well.
Therefore, domestic economic news is good, domestic liquidity is strong. Therefore, FIIs would be nervous because they caught that Iran would do something with the hormose straight and expect them to oil. But as we were very stable during the day, only a hit of about 76 76, so I think there is sufficient supply, though 20% of the world’s oil passes through the hormose straight, even Iran’s oil passes, if Iran will sustain war, they could not stop their own ships, so there were still some less.
Depending on what Iran does, oil can still make more attitude, but I think India is driven by 85% of oil -related Fice Panic, which requires our oil and the fact that the currency will make all our imports more expensive.
Therefore, this is something that foreigners when they see it as a comparative play in different countries, they realize that India can take money from the table. But even this month, domestic liquidity has been very strong. It is more than 60,000 crores of purchases only by mutual funds, which is the reason why each such dip is seen as a buying point.
And the administrators of this fund created their liquidity in the last two months because when the earnings season was in progress, they were not fully deployed. So, at the end of May, they were sitting on a very appropriate amount of cash and I think it has come to the market this month.
So, I think the situation will continue. You will see volatility in the market because geographical states clearly create panic among foreign investors, but domestic fund managers are looking for individual sectors and stocks, and they bring prices closer to average when they look.
Indian markets are not yet cheap. I’m still trading at a very rich premium, I would say, in other emerging markets and maybe 21 Nifty PEs we are above the long -term average. So, we are not yet cheap. But fund managers are tracking the fields and when they see the sinking in certain areas because of this sale, they will move on to the purchase.
Therefore, I see the period of consolidation in the market but there is enough liquidity to support because the Deep Wand will not fall. Any stock price that improves sharply, will find buyers in the home view.
I especially the U.S. Want to get your perspective on the kind of market reaction we see on the futures front. Do you believe that this growth is now being kept mostly by the market and at least from the point of view of the market there is no wrong.
Sunil Subramanian: The US has threatened further strike, so it means that Iran’s defensive abilities are likely to be disabled because Israel is now attacking their missile base after attacking nuclear base. Therefore, it means that they see this that Iran does not have much choices and that China may have sufficient pressure on the hormose straight issue. Markets are reflecting because almost the entire Iranian production is sold to China. Therefore, clearly, China is an important factor there. Therefore, what the markets have realized is that the U.S. The surprise action and the threat of further action will probably prevent this from increasing as Iran is being disabled day by day through this joint strike. But despite the threat of hormose shutdown, it has stabilized at the age of 76 76. So, overall, the world is absorbing the fact that we will be convinced that through more attacks I think Iran will not really do much. It’s a kind of reading that is happening.
And to that extent, the world has also used this geographical political shock. Therefore, there are no reactions we see now when the first Russia-Ukraine war began or when the first Hamas attack on Israel.
Now, the reactions have become much more subdued because people are realizing that these things do not last too long, so that is a fact. The fact is that the market expects that this situation will probably be behind us in a few weeks or a month or so. Therefore, the market tends to read in the future and as they say, you buy on rumors and sell on the fact. Therefore, the fact that this action has taken place has reduced the idea of ​​market thinking processes.
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