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What is Shankar Sharma betting on to create wealth in this bearish market

“You need a serious bear market to create big wealth,” said Sharma.|
Updated: Oct 08, 2018, 12.35 PM IST
Structural weaknesses of Indian economy haunting market: Shankar Sharma
Structural weaknesses of Indian economy haunting market: Shankar Sharma
NEW DELHI: Structural weaknesses of the Indian economy is coming back to haunt us, says Shankar Sharma, Vice-Chairman and Joint MD at First Global.

In an exclusive interaction with ETNow, he added that India is doing badly and looking fragile even in the absence of any big global crisis.

"We are in a degree of a clear bear market and the recent ferocity of selling is not surprising," said Sharma, who was earlier expecting a 20-30 per cent fall in broader markets. He added that market started signs of weakness from January when small and midcaps started falling.

“You need a serious bear market to create big wealth,” said Sharma.

He believes that rising crude oil prices are a concern for the domestic equity market. “Crude oil above $60 per barrel triggers a crisis. We see crude rallying to $100 per barrel,” he predicted.

He termed India's show in the BRICS pack as "concerning".

From investment perspective, Sharma believes that commodity is looking good. “Bear market does not mean that everything will fall. Commodity space is in a very good shape right now. Theme related to industrial metal or chemicals will do well in the coming year,” said Sharma.

Sharma is of the view that India has no exporting or competitive edge in the last 20-25 years. Nobody in the world thinks that India is an exporting nation and foreign flow is a key concern for Indian markets.

Market sentiment turned dull on the looming spectre of a widening current account gap, exacerbated by the galloping crude oil prices. This sent the Indian rupee to a new low on Friday, with the currency going below 74 to a dollar for the first time.

“Markets may fall on a worsening rupee,” he added. The currency has already plunged more than 15 per cent on a year-to-date basis.

“There is a need to fix the core structural framework,” Sharma stressed.

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