Bihar elections, inclusion of HK-China ADRs in MSCI weighing on market: Prashastha Seth

In a chat with ET Now, Prashastha Seth, CEO, IIFL AMC, on the reasons behind the recent slump in the domestic equity market.

ET Now: When the world was falling apart in August and September, Indian markets were resilient. Now that global markets have made a comeback, we are charting our own course. So it looks as if we are moving independently of what the global set up is. What is your view?

Prashastha Seth: No. I think there are a couple of specific events, which are driving the move that we have seen in the last few days. There are two things that markets are very keenly looking at. One is the result of the Bihar elections because that, to an extent, is something that is going to be a driver of the market in the near term.

Second is essentially the news on the MSCI and whether India’s weightage will be decrease in MSCI indices because the MSCI might include ADR shares of China and Hong Kong. Those are the two events that are having an impact on the Indian markets and, as a result, I think the recovery in the Indian markets is lagging the one we are seeing in global markets.