Despite the ongoing Covid-19 wave and selected lockdowns the country economy is expected to grow 11% during the current 2021-2022 fiscal year. One of the drivers are the general rebound in the global economy, but also that India is rolling out vaccines with currently 3% of the population being fully vaccinated. S&P Global has a bit more negative view on India saying the current Covid-19 wave could shave off 2.8%-points of GDP growth and worsen funding conditions. However, the S&P Global report is also forecasting oil demand reaching a new all-time high within the next year.
For now, the equity market is signalling a positive outlook for India, and if Chinese equities could get a sentiment boost then the MSCI Emerging Markets index could join the wider value vs growth trade which is continuing. We recent communicated on our Saxo Market Call podcast, that the value vs growth trade has turned a corner and that we believe value stocks will continue to outperform growth if inflationary expectations remain at current levels or increase.