"Another 5% correction in equity markets is not ruled out"
MUMBAI, JAN 20:
With Indian equity markets dancing to the tunes of global market sentiments, a further fall of about 5 per cent is possible, says Sanjeev Prasad, senior executive director and co-head institutional equities at Kotak Institutional Equities.
However. Indian equity market performance is still better than other emerging markets. Given the volatility and selling pressure, he recommends to take exposure in automobiles, private banks, downstream oil and gas companies and utilities
What is your view on the current market volatility? Where is the bottom?
Volatility has been driven by global events. Nothing really has changed in the Indian economy. Though expectations from the quarterly numbers are low, estimates will be revised further for following fiscal, and hence markets would face selling pressure. Another 5 per cent correction is not ruled out.
Falling crude prices is good for Indian economy but still Indian equity markets are correcting. Your comments!
Falling crude prices is very good for the broader market. Lower input costs have supported urban consumption. Else economy would have been in much worse scenario. We should be very happy about Indian markets performance. Have you seen the plight of other emerging markets?
How much return should one expect in 2016?
One can expect 10-15 per cent return by the benchmark index in 2016. I believe this is a very decent return compared to 2015.
Midcaps and smallcaps are down over 8 per cent 10 per cent, respectively, higher compared to Nifty’s fall of 6 per cent in 2016 so far. Do you see correction in the offing?
Correction is on the way in mid and smallcaps as they had rallied quite substantially in the last two years. It is already happening.
What sectors you like at the current stage?
We like automobiles, private banks, downstream oil and gas companies and utilities.
Public sector banks have been beaten down substantially. Are you positive on that space now?
There is much bigger challenge in that space. We would recommend to stay away from that space.