The measures announced by the finance minister last week are not directly addressing the slowdown in corporate numbers but are focused more on the stock market, says Shankar Sharma, VC and Joint MD of First Global. The recent decline in the market is not because of the FPI surcharge but owing to the negative headline news coming out of India, whether it is geopolitical or economic, he observes.
Talking about the announcements made by the government last Friday with regards to FPI surcharge, he said it was the market and the way it fell that compelled the government to think again.
When asked if he would use the rally to lighten positions or picking up something from the debris, he said this was not a rally to buy but a rally to stay put. “I don’t think any of the stocks that I like to own in the smallcap is going to have any meaningful rally and it would be centred around largecaps,” he said.
He also has clarified that there is no crisis in the world. The US, China and Germany are not in a crisis; at the most, there could be a slowdown and a moderate recession. “However, India is in a different league in terms of corporate numbers, it is just of a different order. So, let us not start patting ourselves on the back that we are in middle of a global meltdown,” said Sharma.