The outlook for the Indian equity market improved significantly in the last two months with a sharp decline in crude oil prices, a reversal in the interest rate environment and resumption of FPI money on the back of a stable currency.
The calendar year 2018 has been extremely volatile with a sharp up and down move with overall returns for 2018 in single digits. This was followed by a smooth one-way rally in 2017 where the Sensex delivered around 28 per cent return with very low volatility.
Indian markets look undervalued vs. their global counterparts as currently, Indian markets are in the midst of a strong corporate earnings recovery primarily led by improving asset quality in the banking and NBFC space.
Existing investors should continue to invest while new investors may start with some lumpsum amount as well along with regular SIP. Indian equity markets may deliver superior returns compared to other asset classes over a period of time.