The BFSI will be the most impacted sector. In the near term, announcements will keep the market engaged but in the medium term there will be challenges, and the bigger banks and bigger NBFCs are better placed to manage the challenges, Naveen Kulkarni, Chief Investment Officer, Axis Securities Ltd, said in an interview with Moneycontrol’s Kshitij Anand.
Edited excerpts:
Q) What are your views on the RBI bazooka 2.0? What kind of impact will it have on the markets and what are the sectors that will benefit?
A) RBI's announcements are in line with its objectives of providing financial stability to the system. When such a large system comes to a standstill then keeping the machinery well-oiled is critical.
So when the machinery starts, it will have a smoother start. The actions of RBI cannot provide for lost income of people but ensuring adequate liquidity in the system is very critical.
The sectors that will benefit from RBI's actions are NBFC sector as they are seeing significant liquidity challenges.
Q) Do you think the market awaits more fiscal measures that could support the economy?
A) Both system liquidity and fiscal stimulus will go hand in hand. If the former is not backed by the later liquidity will evaporate leaving the system with even more significant NPAs
Q) D-Street closed flat but there was a lot of volatility in the market. Do you think the momentum will to sustain?
A) The momentum in the near term could sustain as this is a global rally. Also, hopes of stimulus are real. In the short term, the momentum will sustain but its sustenance is quite questionable over the long term as the systemic challenges become more visible.
Q) What are the important levels which one should track in the coming week?
A) 9,600 on the upside and 8,800 on the downside.
Q) What is your call on Nifty Bank in light of the recent measures announced?
A)The BFSI will be the most impacted sector. In the near term, announcements will keep the market engaged but in the medium term there will be challenges, and the bigger banks and bigger NBFCs are better placed to manage the challenges.
Q) Small & midcaps outperformed in the week gone by – why is that?
A) The sharp correction has led to outperformance and hopes of a market revival. However, the challenges for small caps and mid-caps are higher over the medium term.
Q) Which stocks would recommend for medium to long term?
A) There are a wide range of stocks that look attractive over the medium to long term. In Banking, ICICI Bank and Kotak Mahindra Bank look attractive.
In NBFC space, Manappuram looks attractive. Apart from BFSI, our key focus sectors are FMCG, IT, Pharma and Telecom
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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