Never put much faith in FII flows; remain overweight India in global portfolios: Devina Mehra

We are far below the trend line, and the risk of a big crash is higher when the market is far above the trend line, says Mehra.

The Reserve Bank of India is likely to meet senior officials from some banks on Nov. 2 and Nov. 3 to discuss the prevailing liquidity conditions in the banking system, seven treasury officials told Reuters on Thursday.

Under the two terms of the Narendra Modi-led government, Dalal Street investors had a good time despite implementing demonetization, GST, and the COVID-19 pandemic. The Nifty 50 has doubled in value in 9 years, with foreign and domestic institutional investors pouring in a net of $49.21 billion and ₹7 lakh crore, respectively. Post-pandemic, Indian equity markets increased significantly, making it one of the best-performing emerging markets in the MSCI index. The IT sector gave the best returns to the investors, followed by the financial services and FMCG sectors. Investors remain bullish on India due to its positive macro side improvement and stability.

A gauge of the countrys top 12 biggest banks is set for its worst week since September, erasing around $21 billion in market value through Thursdays close. HDFC Banks earnings has now raised concern about reports from peers ICICI Bank Ltd, Kotak Mahindra Bank Ltd and Axis Bank Ltd.

The current rally in the Indian market will be driven by the domestic sector, according to a statement by Rahul Chadha of Mirae Asset Global Investments. Investors should take a medium-term view as the next three to four months would be challenging due to the US economy slowing down which would affect the export sector. Although Indias luxury market is on an uptick, there are not many plays in that segment. Rremain invested in the Indian market by looking for entry points in the challenging times.

Samir Arora, Founder of Helios Capital, discusses the performance of HDFC Bank, his investment in Paytm, and the attractiveness of PSU names. He highlights the impact of mega trends like digitisation and China plus one strategy on the Indian market. Arora also emphasizes the importance of FII flows. Many investors following trend had landed up in China and put big amounts and have burnt their fingers. They now want to come to India

HDFC Bank, India's largest private lender, saw its employee turnover rate rise to 34% in the last fiscal year from 27.6% a year earlier. At Axis Bank, it climbed to nearly 35% from 31.6%. Meanwhile, Kotak Mahindra Bank's attrition surged to about 50%, with smaller peer Yes Bank in tow at 43%.

Banking and financial stocks are not expected to have a smooth ride as market experts hold contrarian views on the ability of the sector to sustain growth, despite Jefferies' Global Head of Equities Christopher Wood adding Axis Bank to his India Long-only portfolio in May. Small case managers and investors suggest asset quality and margin issues for some banks while FidelFolio Investments' Founder Kislay Upadhyay predicted a high interest rate scenario would impact access to capital, curb the ability to grow and maintain capital efficiency. Meanwhile, Devendra Phadk at Purnartha Investment Advisers said credit penetration at society's lowest strata has increased considerably over the last decade, which could cause credit issues both at the retail and enterprise levels.

Numerous events shaped the country's economic landscape this year, and a few stood out. Here is a recap of all the events that shaped India's economic landscape in 2023.

The Governor also emphasized the need for banks to ensure continued financial and operational resilience, according to a statement from the RBI. Reuters had earlier reported, citing sources, that bank executives at the meeting were urged to focus on keeping risk in check amid a high growth in credit.