Defensives are likely to hog the limelight. From 2009 to 2015, we saw a V-shaped rally in pharmaceuticals, technology, and FMCG stocks, Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities, said in an interview with Moneycontrol’s Kshitij Anand.
edited excerpts:Q) It was comparatively a better week for Indian markets. But, what is the way forward?
A) Last week assured investors that by investing on every dip they can earn better returns in the short to medium-term. The factors that have lead to a sharp rally are stimulus hopes and COVID-19 cases going down across the globe.
If our government fails to fulfil expectations on the stimulus side and COVID-19 cases continue to increase then it would be a double whammy. Investors should be cautiously optimistic from here onwards.
Q) What are the factors which investors should watch out for in the coming week, which is again be truncated one?
A) Even if it is a spoiler for the economy, India should not compromise while tackling with coronavirus.
The world is watching India as to how it is going to deal with the coronavirus crisis. It is the real testing time for India and if we can save ourselves from this crisis, there will be a huge foreign direct investment flow in India in the coming days.
The most important thing is strong control over the spread of coronavirus. Stocks and sectors have stabilised, the market will soon start trading in a range.Q) Small & midcaps outperform - is it value buying which is leading to outperformance or the liquidity factors which is not enough in some of these names as compared to large caps?
A) Currently, largecap stocks are available at comparatively cheaper valuations. Then why does anyone need to run behind small and midcap stocks?
Q) We cannot close our eyes to is "recession" as well as COVID – 19 outbreak. Both the events are interlinked and will have long-lasting damage to the economies across the world including India. What are your views?
A) I believe in the theory of "the market discounts lots of things well in advance". Of course, we cannot close our eyes to recession as well as COVID-19 outbreak but at the same time, we cannot forget that one or the other sector takes the leadership and that helps move the market higher. Our focus should be on recession-proof sectors.Q) Which companies are likely to see a V-shaped recovery after the lockdown?
A) Defensives are likely to hog the limelight. From 2009 to 2015, we saw a V-shaped rally in pharmaceuticals, technology, and FMCG stocks.
If India does well in terms of handling the outbreak then the FIIs flows will increase for the top five companies of Nifty 50.
We should increase our exposure to telecom companies. Internet data is one of the most essential commodities in the current times it would be playing a big role.Q) Any technical trading ideas which investors can look at for the coming week?
A) We should focus on following stocks for the coming week with a positional view of buy -- Reliance Industries, Cipla, ICICI Bank, Infosys, HDFC Bank, ITC and Escorts.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.