‘India likely to be most expensive market in the world’, says Zerodha co-founder Nikhil Kamath


The Indian stock market witnessed a stellar week with both the Nifty 50 and Bank Nifty reaching new all-time highs this week. In the long term, the market holds immense potential, says brokerage firm Zerodha co-founder Nikhil Kamath.

“In the long term, it likely has a lot of potential. In the very short term, the cost of capital is quite high today; so things might remain tight. But over a 10 to 20-year period, it looks good for India,” Kamath said in an interview with ET Now.

When asked about rising interest of retail investors in the market, he said, “ Well, markets are expensive today. India is likely one of the most expensive in the world. It is very hard for anybody to predict timelines to 25,000 but I would suggest one should be cautious when things are expensive; do not buy too much.”

India’s benchmark indices closed the week with gains after a volatile session, as the Reserve Bank of India maintained status quo on key policy rates.

During the session, the Nifty hit an all-time high of 21,006.10, while the Sensex hit a fresh peak of 69,893.8. The Nifty 50 crossed the psychological barrier of 21,000 for the first time ever, gaining a significant 3.5% for the week. The Bank Nifty, meanwhile, surged by more than 5%, highlighting the strong investor sentiment towards the banking sector, this week.

Market ahead

Investors will closely monitor various stock market catalysts in the second week of December, including key domestic macroeconomic data, policy pronouncements from global central banks—such as the US Federal Reserve—alongside foreign capital inflows and global indicators.

RBI kept the repo rate unchanged at 6.50% in its Monetary policy citing strong GDP growth and easing inflation. RBI also raised the GDP growth expectation by 50bps to 7% for FY24 and kept inflation forecast unchanged at 5.4%. It is expected that the RBI’s decision would help in the growth of the economy. Increasing GDP forecast will have a positive effect on the market. We expect that the rate pause will continue for some time,” said Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd.

Nanda further added, “ It is expected that the reversal in trend in global market and FIIs started buying again with stronger participation of retail investors will keep the market spirits high. Benchmark indices hit record highs. Investors are optimistic about India’s strong economic growth and gives India an edge over China. Lower prices of crude oil is also benefiting India to control inflation. At the same time, the recent election victory of BJP in three out of four states boosted investors’ confidence about political and policy stability, expecting more infrastructure investment from government. We expect the sentiment of market will strengthen further. The markets will also keep track at US FOMC meet outcome scheduled next week.”

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Published: 10 Dec 2023, 01:05 PM IST

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