Stock market may have bottomed out, start hunting for bargains: Mark Mobius

Predicting that stocks of and will recover and do well going forward, he said India needs infrastructure and regardless of which party is in power India will have to move forward on that.

When asked whether the market has bottomed out given the fact that jumped over 2,000 points on Wednesday after ending about 4,400 points lower, he said we may have hit a bottom but investors need to be cautious as a lot would depend on the kind of policies that will be followed by the new government.

Describing the election outcome, which gave Street favourite PM Modi a fractured mandate, as "unfortunate", the India bull said he is concerned if will be hindered by the fact that now has a lesser majority in the Lok Sabha.

"I think that PSUs and other stocks will be hit as a result of the change in policies. You've seen some of the big infrastructure companies come down pretty dramatically because there's a fear that infrastructure spending may slow down - the construction of roads, bridges, etc, will slow down," the ace investor said.

Mobius is bullish on as companies making computer hardware, semiconductors, and software will not be affected as much. "You may see some effect on the consumer side, but even there, the economy is going so fast, even with all this political upset, those companies will do fairly well," he said.

Brokerages have started warning that India may suffer a de-rating in the near-term as Modi 3.0 will now need the support of partners to carry out reforms.

"I don't think so (about de-rating). The realize that India is the future. They've already seen that has problems and they want to diversify away from China. Some of these FIIs have been badly burnt in China and don't even want to go back to China," he said while expressing confidence that Sensex can still double in the next 5 years if not earlier.

"We're certainly not at the end of the bull run. Generally speaking, you could say that if a country is growing at 7% like India is now growing, the market and earnings of good companies will go up double that - 14-15%. So you can expect the market index to be rising at that pace over the next 10 years," Mobius said.