Sandeep Tandon-led Quant Mutual Fund believes the risk-off phase in the Indian equity markets is nearing its conclusion. He said that while the market sentiment has become excessively negative, with several segments now falling into the 'neglected or hated' category, it's the right time to adopt a more constructive stance.
"From our perspective at Quant Mutual Fund, the timing is right to become constructive on the markets. We believe that the market has potential to recover and gradually rally from this point on," Tandon said.
He also said that while both economic and corporate data have shown signs of deterioration, these underwhelming indicators are largely priced into the markets.
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In its monthly note to investors, Quant Mutual Fund said, "Although high level macro-economic and corporate earnings data merit tracking, most, if not all of these below-estimates data are factored in and timing is ripe for being optimistic about selective segments of the market. Hence, we are now close to fully deployed and believe that risk-off phase is in its fag-end stage."
October saw Foreign Institutional Investors (FIIs) selling Indian equities worth Rs 1.1 lakh crore. Factors such as weaker-than-expected earnings, China's stimulus measures, and optimism around the U.S. economy with Donald Trump's return to power drove this trend. The sell-off pushed the Nifty 50 down by 8 percent from its all-time high of 26,277.35 and the Sensex nearly 7 percent below its peak of 85,978.25.
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However, with the 'Sell India, Buy China' strategy fading and the Trump trade nearing its final stretch, FIIs turned net buyers last week, infusing $0.5 billion into Indian equities after eight consecutive weeks of selling.
Quant Mutual Fund, founded by Sandeep Tandon, got a mutual fund license from the Securities and Exchange Board of India (Sebi) in 2017. It has been the fastest growing mutual fund in the country, with assets growing from Rs 100-odd crore in 2019 to more than Rs 1 lah crore currently.
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