- Global head of equity strategy at Jefferies, Chris Wood, warned of a potential 25% correction in Indian stock markets if the Bharatiya Janata Party (BJP) does not return to power in upcoming elections.
- Wood believes India is the best domestic equity story among emerging markets and suggests investors remain structurally invested in the country.
- He anticipates a growth cycle in India similar to the period from 2002 to 2009, driven by a housing boom and private capital expenditure.
- In contrast, China’s growth has been slowing, but Wood expects it to recover, although at a slower rate compared to India.
- Wood also noted that the US economy may enter a downturn next year due to monetary tightening and rising bond yields. The focus will be on how the US Federal Reserve manages weakening labor data and high inflation.