Higher probability of 5-7% correction in market than chance of a 10% upside: Ashish P Somaiya

The record high levels being charted by the Indian equity markets are incrementally making domestic fund houses cautious, if not jittery. Ashish P Somaiya, Chief Executive Officer (CEO) of White Oak Capital Management, expects a higher chance of a correction than a rally in the Indian equity markets by the end of the year.

In an interview with Moneycontrol, Somaiya said he sees a higher probability of a 5-7 percent correction in the markets than a 10 percent upside, given that the rally has been too sharp and fast. He also feels that the concentration of fund inflows towards small- and mid-cap stocks, as well as overexposure to select sectoral and thematic funds, is the reason for this caution.

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He suggests that new investors, who have missed the rally thus far, should be careful about entering the markets now since net inflows in the mutual fund industry remain muted and some investors are also taking cash off the table at these higher levels.