India’s
stock
market
has
been
topsy-turvy
in
the
past
week.
Markets
hit
all-time
highs
on
Monday
following
news
of
a
potential
hat-trick
for
Prime
Minister
Narendra
Modi’s
Bharatiya
Janata
Party
(BJP)
but
eventually
tumbled
after
it
began
losing
its
parliamentary
majority.
The
shock
outcome
of
the
mammoth
election
count
means
Modi
will
now
have
to
rely
on
smaller
parties
to
form
a
governing
majority
in
the
543-member
Lok
Sabha,
or
lower
house
of
India’s
parliament.
Such
a
phenomenon
raises
“concerns
about
policy
continuity,
economic
reforms,
and
overall
investment
climate
[causing]
increased
market
volatility,
potential
capital
outflows,
and
a
slowdown
in
both
foreign
direct
investment
and
domestic
investment,”
Dhruba
Jyoti
Sengupta,
CEO
of
Wrise
Private
Middle
East,
told
CNBC
Pro
on
June
5.
The
Nifty
50
plunged
5.93%
on
Tuesday,
while
the
BSE
Sensex
lost
5.74%,
marking
their
largest
loss
since
2020
.
Overall,
the
BSE
Sensex
index
—
which
includes
30
well-established
stocks
on
the
Bombay
Stock
Exchange
—
is
up
around
6.8%
over
the
last
six
months,
while
the
benchmark Nifty
50 index
is
8.04%
higher.
WealthMills
Securities’
equity
market
strategist
Kranthi
Bathini
says
“India’s
stock
markets
need
stable
policy
continuity
going
forward.”
For
his
part,
Sengupta
—
whose
firm
serves
ultra-high-net-worth
and
high-net-worth
individuals
across
Asia,
the
Middle
East
and
Europe
—
is
looking
at
more
long-term
investment
opportunities
in
India.
“India’s
bull
run
will
continue
to
be
supported
by
factors
like
favorable
demographics,
comprehensive
economic
reforms,
infrastructure
development,
digital
transformation,
manufacturing
growth,
robust
FDI
[foreign
direct
investments],
financial
market
development,
rising
consumption,
sustainable
development
initiatives,
and
strategic
geopolitical
positioning.”
Infrastructure
plays
One
segment
Sengupta
is
looking
at
for
the
long
term
is
infrastructure,
thanks
to
a
combination
of
government
initiatives,
policy
reforms
and
private
sector
participation
over
the
next
five
years.
“The
Union
Budget
has
consistently
increased
allocations
for
infrastructure
development.
Every
budget
over
the
next
few
years
is
expected
to
continue
this
trend,
with
substantial
funds
earmarked
for
roads,
railways,
airports,
and
other
critical
infrastructure,”
he
added.
Among
the
pure-play
infrastructure
companies
on
his
watch
are
utilities
company
NHPC
,
electricity
operator
NTPC
and
mining
player
Hindustan
Copper
.
He
has
also
set
his
sights
on
railway
companies
like
Indian
Railway
Catering
and
Tourism
Corporation,
Indian
Railway
Construction
International
and
Titagarh
Rail
Systems
amid
the
nation’s
plans
to
create
high-speed
rail
corridors,
modernize
existing
infrastructure
and
improve
passenger
amenities.
Strong
digital
economy
and
startup
ecosystem
Another
longer-term
theme
on
Sengupta’s
radar
is
the
digital
economy
and
startup
ecosystem.
The
wealth
manager
expects
the
new
Indian
government
to
boost
digital
infrastructure,
which
he
said
will
in
turn
increase
funding
and
investment
and
technological
innovation,
and
foster
a
more
skilled
labor
force.
“These
changes
will
position
India
as
a
global
hub
for
innovation,
entrepreneurship,
and
digital
services,
fostering
sustainable
economic
development
and
inclusive
growth,”
he
said,
naming
sectors
like
biotechnology,
agritech,
fintech
and
cleantech.
Stocks
that
Sengupta
expects
will
benefit
from
this
trend
include
financial
services
providers
like
Canara
Bank
and
Bajaj
Finance
which
will
offer
capital
to
support
the
entire
startup
ecosystem.
Riding
the
consumer
wave
Aside
from
sectors
poised
for
growth,
WealthMills
Securities’
Bathini
suggests
looking
out
for
names
set
to
benefit
from
the
strong
consumer.
These
include
fashion
label
Titan
,
aerospace
and
defense
company
Hindustan
Aeronautics
as
well
as
heavy-weight
conglomerates
like
Tata
Motors
and
the
Adani-owned
Reliance
Industries
.
These
are
companies
that
“can
be
bought
in
the
long-term
as
the
consumption
and
capital
expenditure
cycle
going
to
be
in
uptrend
in
India,”
as
the
domestic
population
—
and,
more
importantly,
the
middle
income
bracket
—
increases,
Bathini
added.
