We have a bullish view for FMCG stocks who benefit the most from the corporate tax cuts. In the coming quarters, we will see it reflecting in their balance sheets.
Stocks such as D-Mart, Jubilant FoodWorks, Tata Global Beverages, Dabur India and Bata India from the FMCG space managed to outperform irrespective of broader trends and still have some space left, Ritesh Asher – Chief Strategy Officer at KIFS Trade Capital, said in an interview with Moneycontrol’s Kshitij Anand.
Q. What a week it has been for Indian markets. The momentum reversed in just four trading sessions. The index has already rallied more than 3 percent this week, do you think the momentum is likely to continue? What were the reasons and do you think Nifty could hit 12,400 in the February series?
A. Yes, we think positive momentum may continue in the near future taking clues from global outlook and measures taken by the government to support various stressed sectors.
We will also see the effect of measures taken by the central bank to infusion liquidity and corporate tax cuts in the first half of FY2020 (H1FY20).
Other contributors to the positive rally are steps taken by the government to boost rural spending, promoting MSMEs and positive earnings from big players, which may further lift the sentiments.
Q. What are the important support and resistance levels to watch out for in the coming week?
A. The important levels to look out for Nifty50 are 11,800 on the downside, and 12,400 on the upside. For Bank Nifty, levels will be 31,000 on the downside and 31,600 on the upside.Q. Any important event which investors should take note of in the coming week?
A. Investors must take note of economic data which includes inflation rates, industrial production data, and manufacturing data that will be out on February 12.
This will give a brief note on the current state of economic conditions. The second major event will be the Federal Budget, also to be presented on February 12. The market sentiment will depend on the data presented.
Q. Top five stocks which recorded a breakout in the week gone by and are still ripe for future returns?
A. We have a bullish view for FMCG stocks who benefit the most from the corporate tax cuts. In the coming quarters, we will see it reflecting in their balance sheets.
If you look at overall fundamentals performance with improving overall demand and volumes we may see these stocks outperforming their peer groups.
Q. What is your outlook on the small & mid-cap space that has performed in line with benchmark indices in the week gone by?
A. Investors always look for the sector which has more steam in it. The small-cap stocks have started performing quite well and have a better future outlook and the ability to outperform the benchmark index.
Currently, the small and mid-cap stocks have given 40 percent rally from the south but if we look at the bigger picture there is still some space left for further growth.
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Exclusive offer: Use code "BUDGET2020" and get Moneycontrol Pro's Subscription for as little as Rs 333/- for the first year.