The year ahead should be better for the equity markets in terms of Nifty returns, says Manish Sonthalia, chief investment officer at Emkay Investment Managers.
Sonthalia believes the Nifty returns should be more reflective of the earnings growth in Nifty EPS and which should comfortably be 15-20 percent.
Talking about concerns for the equity markets in an interview to Moneycontrol, the investment veteran with over three decades of experience in the financial services industry says top-down concerns on global and local macro fundamentals linger on the dollar index, interest rates, inflation, and state elections. Excerpts from the interaction:
Do you expect the oil prices, which boosted the recent recovery in the equity markets, to remain at current levels, considering the geopolitical tension and global economic environment?
It’s very difficult to say where oil prices will be given the geopolitical situation. At best it’s likely to be near the $75-80 range. At worst, it is likely to cross $100 a barrel.
Do you expect the year ahead to be better than the year gone by, for the equity markets? Nifty gained 10 percent from last Diwali.
Yes, the year ahead should be better for the equity markets in terms of Nifty returns. Nifty returns should be more reflective of the earnings growth in Nifty EPS and which should comfortably be between 15-20 percent.
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Do you think most risk factors are now known to the equity market and there will be no major concern from them going ahead?
There are always concerns for equity markets. Top-down concerns on global and local macro linger on the dollar index , interest rates, interest rates, inflation, and States elections.
Do you think India remains underinvested in global portfolios?
Yes, I would believe so. FIIs are not comfortable on India valuations from a short-term point of view.
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Sectors that must be part of the portfolio on this Diwali....
Platform companies in consumption including retailing companies, energy, and financials must be part of the portfolio on this Diwali.
Is the Fed done with the interest rate hike cycle? Do you see a mild recession in the US?
There will be a recession in the US in CY24. I think there will be one more hike by the Fed.
What is your outlook for the second half of FY24 earnings after reading September quarter earnings?
Earnings are pretty strong for the second quarter of FY24. I think the same growth momentum is likely to continue in the second half of FY24.
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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.
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