India is on the path of economic and earnings recovery, said Hiren Ved, director and CIO, Alchemy Capital Management, adding that 2019 is likely to be a good year for equities.
“We are at a cusp of economic recovery, earnings recovery and the idea would be to play for that,” said Ved.
Comparing 2018 to 2013, he said the set up was quite similar in terms of oil prices going up, currency going down, elections in six month, etc., however, the difference was that valuations in 2013 were low but are now high. "The economy in 2018 is much stronger than it was in 2013 and we are no longer part of the fragile 5," he said.
"Moreover, now with the sever correction in oil prices the macro set up is improving and with inflation where it is, the bond yields should be heading lower, which would be good for equity markets," he added.
According to him, the markets are not yet reacting to favourable macros because they could be waiting for the election outcome on December 11.
Talking about investments, he said long-term investors should buy during the period of uncertainty because at those times the good quality stocks are available at reasonable prices.
"One is also seeing some early signs of private capex recovery," said Ved.