India looks less vulnerable to the COVID-19 pandemic, said Dan Fineman, co-head of equity strategy-Asia Pacific at Credit Suisse, on Tuesday. He added that he prefers banking stocks especially private banks in India.
Speaking in an interview to CNBC-TV18, he said, “India looks less vulnerable to the pandemic than it did a year ago and less vulnerable now than developed markets too. We do like material stocks in general and within Asia these stocks tend to be very sensitive to changes in inflation rates. As a house we expect that inflation will be rising globally especially in the US but on a global basis that typically is good for materials, companies, but we also like Indian banks, particularly the private sector banks.”
He also cautioned that investors need to monitor the rise in COVID-19 cases. The infection and increase case load in India is of less concern than in Europe or in US, he added.
"The reason being that fatality rate is low in India. Yes, it’s something that we are concerned about but I do not think it will derail a market rally based on strong fundamentals,” he noted.
Talking about stocks, Fineman said that smallcaps tend to outperform largecaps during economic recovery.
He further added that he is comfortable with Indian valuations at present.
"If we look at India relative to the other markets, it is expensive on some matrix but it has always been expensive and that is because you have got superior growth on long-term and even on short-term basis in India. Investors are willing to pay for that superior growth,” he said.
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