The new year has been pretty good for Indian market bringing in Rs 10,000 crore foreign investors' money in just four weeks. The Nify gained 12.5% while the Sensex jumped 11.5% in these four weeks. However, experts are worried about a correction now.
Gaurav Doshi, Morgan Stanley Private Wealth Management is concerned that the market is likely to lose steam at around 5300-5400. In an interview to CNBC-TV18, he said that the market may consolidate post the risk-on rally and sees 4800-4850 as support.
Doshi also warned that asset quality continues to be a concern for PSU banks but thinks that worst is behind us in terms of earnings downgrades.
As an investment strategy, he advises to book profit in FMCG and pharma stocks. Below is an edited transcript. Watch the accompanying video for more. Q: From 4,500 we have reached 5,200. How much more do you reckon in this rally?
A: There could be little more steam left but not too much. We are over the 75% mark of this risk on rally that we are seeing. The momentum will stay but once the momentum dies, fundamentals will take over. A lot of stocks to me have run up a little bit ahead of their fundamentals so there is potential for some sort of a pullback.
Earlier in January I was talking of 5,000-5,100 but with the way the rupee has behaved, the FII flows that have come in and the way the RBI has behaved, that 5,000-5,100 top moves to be the 5,400 range but not too much above that. I would think that this rally would definitely lose steam closer to the 5,300-5,400 levels. Q: It
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