High inflation and synchronous tightening in global liquidity led by the U.S. is driving the market towards capitulation, a phase when investors give up hope of gains and sell in panic.
That’s according to Dhananjay Sinha, managing director and chief strategist at JM Financial Ltd. In the last six months, India’s benchmark indices have slackened by about 15%, Sinha told BQ Prime’s Niraj Shah in an interview.
“We are heading towards a global slowdown, every institution is scaling down the growth trajectory, the U.S. Fed has scaled down by more than 100 basis points,” Sinha said. “These will start reflecting on India’s growth and earnings expectation”, he said, advising investors to wait for “eventual capitulation” instead of “getting brave”.