Deepak Jasani: Market to rise again after a few days of small correction: Deepak Jasani, HDFC Securities

Widget apcmwh

What we are seeing today is some sort of a profit-taking or going back to reality, said Deepak Jasani, Sr VP, Head, Retail

Research, HDFC Securities, in an interview with ETNOW.

Edited excerpts:

After a good upmove in the last one week odd, suddenly over the last two days the sentiment seems to be a bit muted. Is it a temporary trend or is it going to last?

Markets have run up quite sharply in a very short period of time, mainly driven by strong FPI inflows. Small and midcaps which started to rise initially are now subdued. What we are seeing today is some sort of a profit-taking or going back to reality. This period of small correction can last for a few more days post which, we expect another rise. We could be looking at some sort of a buying climax for Indian as well as for US markets in the next few weeks.

You have talked about avoiding FMCG, power and auto sectors in your note. These are usually beneficiaries during election. Why are they in your avoid list?

FMCG is an avoid because the valuations are still high and margin of safety is limited. The monsoon is coming up and we do not know how good or bad the monsoon is going to be. The auto sector is undergoing some sort of a slowdown. There is difference of opinion on whether this slowdown will last only a few months or a few quarters.

For the time being, the numbers may not improve in a hurry. It may take a couple more months, at least for the auto sector to form some sort of a base. From what we have studied over the last two or three elections, PSUs and capital goods are the clear winners in the period between the date of announcement of election and the election results. Both are based on expectations of better policies being implemented post new government formation.

ET Now: What about the banking space? You appear optimistic on financials and banking sector. What are you betting on — select NBFCs or larger private banks or larger PSBs?

The PSU sector as a whole will do well in this period. PSU banks also can do well till the election results are out, based on hope and expectations that a new government will come out with policies which are will boost their profitability.

Among NBFCs, there is a clear divide between the pedigreed ones, which will continue to do well and the others, which will face a lot of problems in terms of availability of liquidity and creation of NPAs. For the time being, banks may do better than NBFCs.

Widget apcmwh
Source link

Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

error: Content is protected !!

Adblock Detected

Please consider supporting us by disabling your ad blocker