Moneycontrol
Nov 15, 2017 11:32 AM IST | Source: CNBC-TV18

Nifty down 3% from highs but there is nothing to worry about for investors

We saw high single-digit growth for Nifty and the pace of downgrades has reduced. At the aggregate level, a lot of positive surprises came from global commodities pack, says Mihir Vora, Director & CIO, Max Life Insurance.

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The Nifty50 has fallen a little over 3 percent or 340 points after hitting a top of 10,490 earlier in the month of November, but there is nothing to fear, suggest experts.

“The market is consolidating, it is down 2-3% from the peak which is fine. But, the fact remains that we need earnings momentum to come back to markets which we have not seen and with bond yields having reason sharply over the past few days is giving mixed signals to the economy,” Mihir Vora, Director & CIO, Max Life Insurance said in an interview with CNBC-TV18.

Yes, we need growth to accelerate but with yields rising we might have that in question, he said. Indian bond yields climbed to their highest in 14 months on Tuesday weighed down by concerns of rising inflation, and dimming prospects of a further rate cut by the Reserve Bank of India.

Mihir Vora
Mihir Vora
Director & Chief Investment Officer|Max Life Insurance

Commenting on the earning season, Mihir said that we saw high single-digit growth for Nifty and the pace of downgrades has reduced. At the aggregate level, a lot of positive surprises came from global commodities pack.

Local consumption stories are concerned, except auto and to some extent, FMCG sectors are concerned we still have to see an uptick in other segments like PSU Banks. It was a mixed bag, but it looks like the worst may be over in terms of earnings downgrade cycle, said Mihir.

According to a recent media report, the Net profit (adjusted) for 700-odd firms grew 13.45 percent in the three months ended September 2017, over the September 2016 quarter (year-on-year).

The disruptions caused in the run-up to GST resulted in only 1.08 percent year-on-year growth in net profit for these companies in the June 2017 quarter, the report said.

Commenting on the PSU banks, Mihir said that we were underweight in the sector but after the recapitalization we have reduced our stance.
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