Oct 12, 2017 02:56 PM IST | Source: CNBC-TV18

Macquarie’s Bhatia says market may correct 5%, open up buying opportunity

Places bet on better economic prospects going forward and hence believes any correction would be a good time to keep purchasing.

As the market continues to move sideways after seeing an almost one way rally in the past one year, experts say a near term correction could be a good buying opportunity.

“There could be a correction of around 5 percent and anything above that (mark) is a fantastic buying opportunity,” Sandeep Bhatia, Head of Equity, India, Macquarie Securities Group, told CNBC-TV18 in an interview, adding, the market could take a breather for now.

Bhatia, however, believes nothing has structurally impaired the economy. “India has done a lot of work in the past three years and has paid a price in terms of GDP and earnings growth. We have taken a very bitter pill, but it should put us on the growth path in five years,” he told the channel.

Speaking on earnings expectations for the quarter, Bhatia said the activity levels could see a pick-up in this quarter, while earnings will come through in Q4.

Among stocks/sectors, he feels stocks such as ICICI Bank, HDFC and HDFC Bank are worth taking a look at. Subsidiaries performing well along with listings will help the parent firms he said. Among corporate banks, ICICI Bank remains the favourite pick.

Elaborating on the liquidity situation where domestic buying has offered strong support, while FIIs sold big. “That is the way economy and the market should behave,” he said, adding, foreign fund managers are not betting on earnings growth to come soon.

In fact, the overweight stance needs to be cut down and hence, the FII selling seems to be taking place, he observed. Additionally, IPOs and government divestment plans are good and will help in diverting liquidity.

In the discretionary space, he likes Titan and Jubilant along with Voltas. Urban areas, he said, have been strong in consumption and GST has helped businesses such as Titan.
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