“The current valuations are reasonable and long to medium-term fundamentals are strong so keep investing in equities. This would be India’s decade,” Vivek Sharma- Director (strategy) and Head of Investments at Gulaq a part of Estee group says in an interview with Moneycontrol.
With more than 18 years of journey in capital markets from application developer and derivatives trader to building Gulaq, Vivek believes inflation and interest rates are obviously going to be the driving factor going ahead.
“Another one would be the elections in India in 2024,” he said.
Do you think the US Fed and RBI rate hike cycle is near its peak now? Any timeline for the reversal of rate hikes?
January’s non-farm payroll was strong, so this Friday's number would be closely watched.
Going forward hard data would be dictating the direction of interest rates. If the data on the labour market and inflation continue to come worse than expected, interest rates would certainly go up.
European Central Bank (ECB) president Christine Lagarde has also indicated a 50 bps hike because of the higher inflation in the eurozone. So it doesn't look like the cycle of rate-hike is near its peak.
Are you focusing on themes contributing to domestic recovery instead of exports?
Irrespective of the business area, whether they are focusing on domestic consumption versus exports, we pick stocks suitable to the current market scenario.
For example, the current scenario supports stocks, which are good value plays as well as score high on the quality factors. Whether these stocks in these categories lie on the domestic consumption theme or the export sector is immaterial.
Do you think the market is now ready to move towards record highs or one more big correction is still possible before recovery?
We are not in the business of predicting the markets. We firmly believe that predicting the markets is at best a useless exercise. What we have been advising our clients is that the current valuations are reasonable and long to medium-term fundamentals are strong so keep investing in equities. This would be India's decade.
What are the key factors that will decide the market direction going forward?
Inflation and interest rates are obviously going to be the driving factor. Another one would be the elections in India in 2024. We will now hear much more about elections, which way the tide is swinging and will increasingly dictate the movement of markets.
Any themes/sectors where you have a super bullish view?
The only theme where we are super bullish about is India. Money will keep on rotating between sectors, which our algos keep track of very closely and we rebalance our portfolios based on this and other such factors.
Investors would do well if they invest in broad-based funds which do not cater to specific factors or sectors.
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