Very bullish on India; Narendra Modi government has renewed optimism: Mark Mobius

NEW DELHI: With the Narendra Modi-led NDA government ensuring renewed optimism, Mark Mobius of Franklin Templeton Investments told ET Now that he is 'very bullish on India.'

Mobius expects to increase allocation to Indian stocks going ahead. "India remains the second-largest holdings in our Asia funds. I will be patient about investments in India," Mobius said.

While Mobius continues to look for bargain stocks in India, he sees a 'lot of opportunities' in small cap stocks. Mobius is bullish on oil & gas stocks as well. "I own a lot of tech stocks in portfolio currently, like TCS," Mobius said. Mobius also remains bullish on banks in India. "Banks will benefit from economic recovery," he feels.


Read full interview: Expect to increase allocation to Indian stocks


According to Mobius, "Growth rates in Emerging Markets are very high, justify valuations."

Mobius is of the opinion global liquidity is driving stock markets up. "Many countries are printing money to avoid currency appreciation," he said.

The S&P BSE Sensex has rallied over 25 per cent so far in the year 2014, helped by a strong support by foreign institutional investors which have already made a net investment of Rs 1.98 lakh crore ($33 billion) into the country’s securities market.

Emerging markets are considered vulnerable to monetary policy tightening in the US because a stronger dollar is likely to deter FIIs from making fresh investments.

Record-low interest rates will be around for at least a few more months, the Federal Reserve made clear on Wednesday.

By mid-2015, economists expect the Fed to abandon a nearly 6-year-old policy of keeping short-term rates at record lows. Those rates have helped support the economy, cheered the stock market and shrunk mortgage rates. A Fed rate increase could potentially reverse those trends.

(With inputs from AP)