The current bear market in Indian markets is purely driven by local factors, unlike most others seen in history, said veteran investor Shankar Sharma, while advising that own solutions need to be found to come out of this.
“We have had four major bear markets in India since 1990: ’92: Harshad Mehta. 2000: Dotcom. 2008: GFC. 2020: Covid,” said Sharma.
Sharma says the market recovered fairly quickly in three cases except the one following the Harsha Mehta fiasco. The Mehta-driven bear market was driven by obvious local factors, while others were more global-oriented.
The scary aspect for investors in “Harshad Mehta Mandi”, as Shankar Sharma calls it, is that the bearish phase lasted nearly 10 years.
“Similarly, this current Bear Market we have is 100% local. We need to find our own bullets to come out of this. And if 0.25% rate cut & Rs. 800/ per Capita stimulus, count as bullets, God save us,” said Sharma.
Analysts say the recent market correction was not driven by any fundamental weakness in India but rather by technical factors, primarily FII selling, who pulled out over Rs 2 lakh crore in the last three months.
With valuations at attractive levels, there is a clear upward pressure from a fundamental standpoint,” said Vikas Gupta, CEO and Chief Investment Strategist, OmniScience Capital.