"Engineering is proving to be the sector of the decade, and it could very likely see the continuation of the strong trends," Naveen Kulkarni, Chief Investment Officer at Axis Securities PMS said in an interview to Moneycontrol.
Further, he believes power stocks can still rally from current levels as the underlying trends are very strong, and many stocks still offer good value at current levels.
For the markets, Naveen with more than 15 years of experience in the equity research says political events and economic activities are likely to be critical drivers for the markets going ahead.
Q: Do you think one should be very selective in buying stocks from defence and power stocks considering the rally they have seen in the past?
Yes, one should be selective in buying defence stocks, as the run-up in these stocks has been beyond expectations, leading to a certain degree of exuberance. However, power stocks can still rally from current levels as the underlying trends are very strong, and many stocks still offer good value at current levels.
Q: Are you increasing exposure to the consumer discretionary sector?
We continue to look at the consumer discretionary sector favourably. Our focus areas are autos, travel tourism and hospitality. We already have significant allocation in the space, and if there are good bottom opportunities, then we are likely to increase our allocation in the space.
Also read: Satyam scam: SEBI orders company's promoters to cough up Rs 1,747 crore
Q: Do you see margin expansion in the healthcare sector going ahead? Do you think it must be part of a portfolio?
Margin expansion over the long term is likely because of the structural trends in the sector. However, it won't be easy to see this in the short term as many factors impact it.
Q: Will the market continue its run up in coming months, considering there won't be a rate hike going forward?
Equity markets tend to react quite fast to rate hike expectations, and the current rate hike pause is mainly in the price. Thus, we do not expect a rate hike pause to be a significant factor going ahead. Political events and economic activities are likely to be critical drivers for the markets going ahead.
Also read: HUL rejigs leadership with focus on beauty and personal care, digital transformation
Q: Do you expect the Fed to start rate cuts in the middle of next calendar year?
It is difficult to estimate this as it will depend a lot on recessionary trends. If global economic activity remains at current levels, then rate cuts mid of next year are unlikely.
Q: What do you expect from the commentary by the Monetary Policy Committee and RBI governor next month?
Focus will be on the inflation trajectory, and the banking sector will be a key monitorable.
Also read: Fed's Powell notes inflation is easing but says further progress is needed
Q: Your take on the engineering, research & development space. Do you see big growth in the space and should it be in the portfolio for the long term?
Engineering is proving to be the sector of the decade, and it could very likely see the continuation of the strong trends. We have made significant allocations to areas like precision engineering and others. We believe that these areas will continue to deliver strong returns for a significantly longer time frame.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
