Indian equity benchmark indices are taking a U-turn as the global picture is not favourable, and it all depends on the right names in each sector that investors pick since growth is not necessarily from one particular sector, Prashant Khemka, Founder of White Oak Capital Management, has said..
Speaking to CNBC-TV18, Khemka shared his thoughts on the current market condition in India, rising Ukraine tension and its impact on the global markets, and the right strategy for investors to navigate volatility.
Underscoring that domestic equities are guided by global cues, Khemka listed out factors that have caused the current volatility. Global cues have turned in favour of bears as the Russia-Ukraine crisis worsened, and the Indian market is facing its negative impact. Currently, benchmark indices are taking a U-turn as the global picture is not favourable, he observed.
"What we see in India is a bit of what we see globally. Even when markets started this year, they were a bit volatile. The geopolitical situation is the main one. Yesterday's sanctions against Russia also add to it. Inflation has been sharp. Commentary from the US fed is not encouraging," Khemka said.
"The broader markets declined by nearly three percent yesterday. It is not much of a worry. The small caps are down. But this is not exactly a pullback if we take the situation that we normally see during volatile times. Markets were also buoyant in the earlier times on account of how global conditions were," the market expert noted.
Giving his outlook on the present US market, he said, “Globally markets have pulled back. Nasdaq is down 15 percent. S&P 500 is down about 10 percent and the US broader markets are also down. Mid and small caps in other indices are also down.”
When asked what has made the markets buoyant in the last two years and the advice he offers for investors who made money in booming spaces like midcap IT earlier, Khemka said, "Any particular advice for them at this point in time is difficult to suggest."
For the last two years, the markets were buoyant. “First-time retail investors who got profits previously on their initial investments got attracted but now they are not used to volatility. For them volatility is new since they have only seen markets going high," he opined.
The IT sector has found favour with the analyst. Supporting his argument and advising investors to remain in this space at this moment, he said, "With Nasscom projections for the IT services sector, IT exports are expected to touch $200 billion this year, including the domestic business."When asked whether consumer stocks have the potential to outperform the market if investors remain invested for a longer period of time, Khemka pointed out that it all depends on the right names in each sector that investors pick, and growth is not necessarily seen from one particular sector. "We assume each sector will perform in line with the market over the long term. And one should pick right names from each sector,” Khemka added.