India will become the fastest growing large economy in the
world, eclipsing China, in 2018 and the country's equity market will jump to
become the fifth largest in the world, a report says.
According to a Sanctum Wealth Management report, when the rest of the world
offers low growth and insufficient structural change, India, by contrast, is
seen as a reforming economy with the prospect of strong long-term growth.
Sanctum is a Delhi-based professional wealth management company. At a time when
developed economies are cheering 2-3 percent growth, India is focused on
breaching 7.5 per cent, the report said.
Moreover, India also benefits from a favourable contrast to other emerging
markets. In particular, the fact that China is down-shifting to a slower pace
"Prospective returns for equities are much
higher than the 6-8 per cent that one can expect from fixed income," it
However, if inflation or rates rise, markets are not
likely to register further gains. Muted earning could also impact market
performance, it said.
the rapid pace at which the Indian economy is developing, investors today are
faced with the need to make crucial investment decisions amidst multiple cross
currents, using a complex array of choices," Sanctum Wealth Management
Chief Executive Officer Shiv Gupta said.
As per the report, a major factor that has changed is that the domestic buyer
now sets market prices. Domestic mutual funds bought equities worth 15.3
billion US Dollar against 8 billion US Dollar by foreign investors in 2017.
The report that identifies various big-picture trends at play this year in the
domestic and global economy, noted that Aadhaar, Jan Dhan, Demonetisation, GST,
are working to create a new inclusive infrastructure in India.