Ajay Bagga says 'make hay in May' as markets rally, fears of a slowdown fade

Ajay Bagga, Chairman of Elyments Platforms

It's time the old adage of 'sell in May and go away' be rephrased as 'make hay in May', believes Ajay Bagga, Chairman of Elyments Platforms, looking at the stunning rally in the markets and ebbing fears of a slowdown.

In an interview with Moneycontrol, Bagga expressed his view that there is currently no threat of a recession in the US, citing a 1.9 percent GDP growth rate from the Atlanta Fed's latest reading.

Bagga also mentioned that a 25-bps rate hike in June is not ruled out, as there is division among Fed members regarding rate hikes.

Sectors to watch out for

He highlighted the infrastructure sector as one to watch out for, as it tends to perform well in the year before elections, with significant focus from central, state, and local governments. Banks and financials will also benefit from India's growth and remain strong bets for foreign institutional investors (FIIs), he said.

Bagga suggested that if there is a slowdown in the US in the coming quarters, there may be a sharp correction in IT space in India, presenting a good opportunity to reenter the sector as it is currently under-owned.

Nifty at 20k soon?

Asked about the possibility of the Nifty reaching 20,000, Bagga said there is momentum for the index to breach that level, but the fundamentals need to be considered.

He also acknowledged that while India is in a favourable position, external factors such as a tightening Fed and China's slowdown could impact the market.