“Everybody understands, India is a long term growth story,” said Christopher Wood at the ET World Leaders Forum while speaking on Asia’s equity strategy.
He described India as “the best stock market in the long-term stock market story in the world,” but acknowledged its structural challenges. Most capital expenditure in the past decade has come from the government rather than companies, and the private sector investment cycle remains weaker than expected.
High valuations but lasting premium
On valuations, Wood was direct. “Evaluation wise, India is an expensive market.” He explained that India has always traded at a premium compared with other emerging markets, reflecting the confidence investors place in its long-term growth.
He noted that foreign investors have reduced exposure in recent months, but the premium has usually held over time.
Interest rates and Monetary Policy
Last year, the Reserve Bank of India followed a tighter monetary stance, which slowed credit and investment. But Wood pointed out that conditions are shifting. “Interest rates in India are coming down,” he said, suggesting the easier policy should help stabilise growth without undermining the stock market.
Asset and wealth management boom
Wood praised the role of domestic investors in shaping India’s markets. Despite volatility, systematic investment plans and equity mutual funds have attracted steady inflows. “The wealth management industry [is] a huge success in India; it is the most dynamic market in the world,” he said.
He highlighted that these inflows continued even during market corrections, reflecting growing household participation and trust in financial markets.
Stock Market consolidation
After a strong performance last year, Indian equities are now in a period of adjustment. Corporate fundraising, through new listings and placements, temporarily capped market gains. Yet Wood described the slowdown as temporary. This year, he said, is one of “healthy consolidation,” which could provide investors with new entry points.
China, emerging Markets and trade shifts
Beyond India and the US, Wood pointed to structural shifts in trade. He noted that “the reality is more countries trade more with China. So, there's a limit of how much they can compromise trade with US.”
He said trade between emerging markets continues to grow, with China’s exports to the Global South increasing. A weaker dollar and long-term selling of US Treasuries by foreign central banks, he added, may also accelerate capital flows away from America.
Risks from the United States
Turning to global risks, Wood examined the fiscal and monetary position of the United States. He argued that Washington is under strain because of high debt servicing costs. “The Fed is been under such pressure to cut rates. Is simply because a Trump administration is desperate to get the interest rates down to reduce the cost of disservicing. This is this is the key part on the fiscal situation in America.”
He said that net interest payments and entitlement programmes such as Medicare and Social Security already account for 93.5 percent of federal receipts. “So that tells you that in any kind of downturn, the US fiscal situation stops working because the revenues will go down.”
On tariffs, he said plainly, “There is one source of revenue increase – tariffs.” In July alone, tariffs brought in 27 billion dollars. While this gives temporary fiscal relief, he warned that “the risk of tariff, is that [it] turned out to be recession in the US.”
The AI bubble and US markets
Wood also drew comparisons between the late 1990s technology boom and the current enthusiasm for artificial intelligence. “All the speculation on the Internet proved to be right in terms of the impact of the Internet on the global economy, but that didn't help many of the stocks that went down. We're having an even bigger overinvestment bubble in AI than we had with the Internet.”
At the same time, he acknowledged America’s reliance on the sector. “Without AI investment, America would be a very weak economy,” he said. “AI is a big driver in the US stock market, and also the US economy.”
For India, Wood struck a confident note. Despite expensive valuations and the slow pace of private investment, he underlined that domestic participation, a stronger financial system, and easing rates will keep the country’s growth story intact. As he put it, “Everybody understands, India is a long term growth story.”
He described India as “the best stock market in the long-term stock market story in the world,” but acknowledged its structural challenges. Most capital expenditure in the past decade has come from the government rather than companies, and the private sector investment cycle remains weaker than expected.
High valuations but lasting premium
On valuations, Wood was direct. “Evaluation wise, India is an expensive market.” He explained that India has always traded at a premium compared with other emerging markets, reflecting the confidence investors place in its long-term growth.
He noted that foreign investors have reduced exposure in recent months, but the premium has usually held over time.
Interest rates and Monetary Policy
Last year, the Reserve Bank of India followed a tighter monetary stance, which slowed credit and investment. But Wood pointed out that conditions are shifting. “Interest rates in India are coming down,” he said, suggesting the easier policy should help stabilise growth without undermining the stock market.
Asset and wealth management boom
Wood praised the role of domestic investors in shaping India’s markets. Despite volatility, systematic investment plans and equity mutual funds have attracted steady inflows. “The wealth management industry [is] a huge success in India; it is the most dynamic market in the world,” he said.
He highlighted that these inflows continued even during market corrections, reflecting growing household participation and trust in financial markets.
Stock Market consolidation
After a strong performance last year, Indian equities are now in a period of adjustment. Corporate fundraising, through new listings and placements, temporarily capped market gains. Yet Wood described the slowdown as temporary. This year, he said, is one of “healthy consolidation,” which could provide investors with new entry points.
China, emerging Markets and trade shifts
Beyond India and the US, Wood pointed to structural shifts in trade. He noted that “the reality is more countries trade more with China. So, there's a limit of how much they can compromise trade with US.”
He said trade between emerging markets continues to grow, with China’s exports to the Global South increasing. A weaker dollar and long-term selling of US Treasuries by foreign central banks, he added, may also accelerate capital flows away from America.
Risks from the United States
Turning to global risks, Wood examined the fiscal and monetary position of the United States. He argued that Washington is under strain because of high debt servicing costs. “The Fed is been under such pressure to cut rates. Is simply because a Trump administration is desperate to get the interest rates down to reduce the cost of disservicing. This is this is the key part on the fiscal situation in America.”
He said that net interest payments and entitlement programmes such as Medicare and Social Security already account for 93.5 percent of federal receipts. “So that tells you that in any kind of downturn, the US fiscal situation stops working because the revenues will go down.”
On tariffs, he said plainly, “There is one source of revenue increase – tariffs.” In July alone, tariffs brought in 27 billion dollars. While this gives temporary fiscal relief, he warned that “the risk of tariff, is that [it] turned out to be recession in the US.”
The AI bubble and US markets
Wood also drew comparisons between the late 1990s technology boom and the current enthusiasm for artificial intelligence. “All the speculation on the Internet proved to be right in terms of the impact of the Internet on the global economy, but that didn't help many of the stocks that went down. We're having an even bigger overinvestment bubble in AI than we had with the Internet.”
At the same time, he acknowledged America’s reliance on the sector. “Without AI investment, America would be a very weak economy,” he said. “AI is a big driver in the US stock market, and also the US economy.”
For India, Wood struck a confident note. Despite expensive valuations and the slow pace of private investment, he underlined that domestic participation, a stronger financial system, and easing rates will keep the country’s growth story intact. As he put it, “Everybody understands, India is a long term growth story.”
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