Inflow into risky assets supportive for India: Punita Kumar

Indian market got a boost after an aggressive selling in December. This was seen as a major entry opportunity by experts. Punita Kumar Sinha, Managing Partner, Pacific Paradigm Advisors feels that inflows into risky assets will be supportive for Indian equities.

In an interview to CNBC-TV18, Sinha said, "The January effect has been tested over the last 50 years by economists and empirical people came back in force. People sold too aggressively, given how bad the year was and then you have to get back in at some point. People were getting back into risky assets as they felt things were slightly improving." She explained that aggressive selling in December made valuations attractive and as a result the market have historically rallied more than 10% post sell-off. As a strategy, she prefers cyclicals over defensives at this point. Sinha feels that midcap cap goods companies are available at attractive valuations. Below is the edited transcript of her interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying videos. Q: What have you made of the January rally across global risk assets? A: December was a really terrible month. There was a lot of tax loss selling, atleast in US. There were talks about the January effect this year. The January effect has been tested over the last 50 years by economists and empirical people came back in force. People sold too aggressively, given how bad the year was and then you have to get back in at some point. That