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Bajaj Finance, Kotak Mahindra Bank will bounce back strongly, says HDFC Sec's Dipen Sheth

"We will have to see how the coronavirus plays out before we take a call on what kind of damage they are going to face," the RBI said.

March 27, 2020 / 05:14 PM IST
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There is something much bigger than Reserve Bank of India (RBI), much bigger than stock market, much bigger than macros right now -- the human survival issue – that we are confronted with – is far more important than what is happening to micros and markets is the word coming in from Dipen Sheth, head of equity and strategic marketing at HDFC Securities.

"The worry right now is the pandemic which is rising every day. This is getting scary, we need a cure and we need it fast. Markets will gyrate on a daily basis, macros will look challenged and markets will run up when we have days like these when announcements and expectations run high and then suddenly some bad news will come out. I am told the next 8-10 days are very critical for India – markets will go up, markets will go down,” he said.

“We need to get a fix on what is happening here before we take a call. You can easily get hacksawed by the market. It is time to be a very disciplined trader, if you must trade otherwise sit back and enjoy the ride,” said Sheth in an interview with CNBC-TV18.

Talking about financials, Sheth said, “It looks like a very exciting time. You are going to see a textbook response very likely from the government and organs of the government such as RBI -- you are going to see fiscal easing and some of that was announced yesterday in the Rs 1.70 lakh crore package, there will see monetary easing and an interest rate cut today and of course regulatory easing, which is much more exciting from a stock market perspective."

According to him, banks will be given some leeway in terms of recognizing non-performing assets (NPAs) and some forbearance there, which should immediately translate into very good sentiments on the banks, which were the most battered and which were the most highly valued and were commanding the sexiest valuations with the highest possible growth rates.


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"So all the shining boys of the financial world are going to be back in fashion – Bajaj Finance, Kotak Mahindra Bank, let alone my own parent bank. It is just that there is going to be a massive reflation of sentiment. It is a great time to be a trader,” he said.

If I am morphing into a ruthless and emotionless trader today, I would take money off the table at every rise but if I am a long-term investor and if I have already got a lot of money stuck in the markets, I will wait for them to come back to a certain level, he advised.

"As a message for long-term investors – who have suddenly been hit by the 30-40 percent rocket, if you are already allocated into equities, take it easy,” he further mentioned.

Speaking about COVID-19 impact on the markets, he stated, “We will see more disruption before we see repair. That is the time to watch out for how industries are going to move fundamentally. Industries like automobiles are terribly integrated in their global supply chains, so are chemicals, so are whole lot of other industries such as capital goods, hi-tech manufacturing. Service sector firms like hotels and hospitality, airlines and travel are by definition globally integrated."

"So, we will have to see how the coronavirus plays out before we take a call on what kind of damage they are going to face. Right now, most of the stock market crack is about anticipatory damage on their business. It would be hazardous to make guesses," he said.


Source: CNBC-TV18
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first published: Mar 27, 2020 05:14 pm
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