HSBC AMC expects earnings growth to help start another bull run

Even as the market underwent a phase of capitulation in the recent past, experts at HSBC AMC expect strong earnings to push indices higher, going forward.

Right now, trade war fears, oil prices and a strengthening dollar have affected Indian markets.

"As events have rolled over, the actual impact of trade wars may not be as high… investors could focus on earnings recovery, which has been visible in the last three quarters," Tushar Pradhan, CIO at HSBC AMC, told CNBC-TV18 in an interview.

In such a situation, when the news flow gets worse, the environment will start seeming attractive, he said.

Pradhan also pointed out how in the past couple of years, the rhetoric was positive, but the earnings were not. He added that with earnings growth coming into the picture, it is only natural that the market will grow more hereon.

In fact, from a fundamental perspective, the bull market has not even begun, he said, adding that the prices are set to follow earnings trends, which is exhibiting early signs of recovery.

"If the earnings do not see a pick up, then the market could see some consolidation," he said.

Among midcap stocks, Pradhan recommended looking at those with strong earnings trends.

Speaking about systematic investment plans (SIPs), he said that the only investors exiting right now were the new and immature ones. Those who have parked funds from a long term perspective may not have been the ones who exited the market.