12 Oct 2016

#india: strong consumer confidence

We are approaching the second quarter results season, in which we may see evidence of inventory-building in anticipation of a bumper festival season. There is already evidence of strong consumer confidence arising from the seventh pay commission awards and the expectation of an excellent kharif harvest feeding through to sales of two- and three-wheelers. Improved execution of public sector infrastructure projects is also evident and this may eventually be the spark for a recovery in private sector investment as excess capacity gets absorbed through the rest of this fiscal year and the first half of the next. With the new MPC laying out a path to fuirther monetary easing, the outlook for Indian equities looks assured.

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