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Market can give back 8-10% in this round of selling: Samir Arora

Last week, US Fed chairman Jerome Powell in an extremely hawkish speech said the Fed will keep raising rates for a while as inflation has not come down to comfortable levels. Following his comments, shares fell like nine pins across the globe

August 30, 2022 / 01:58 PM IST
Helios Capital founder Samir Arora.

Helios Capital founder Samir Arora.

 
 
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As the market has seen some selling recently, Samir Arora, founder and fund manager at Helios Capital, believes this might not just be a blip on radar and more selling may be in the offing.

“It can lose 8-10 percent,” said Arora in an interview with CNBC TV-18. “If those guys (US Fed) increase their policy rates, that creates a lot of problems for RBI. Whether they should increase rates or if not then what to do with currency.”

Last week, US Fed chairman Jerome Powell in an extremely hawkish speech said the Fed will keep raising rates for a while as inflation has not come down to comfortable levels. Following his comments, shares fell like nine pins across the globe.

Most of the selling was seen in technology names. Indian IT stocks were also among the worst hit on Dalal Street as investors factored in prospects of lower growth in key markets for them – the US and Europe.

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“I don’t think it is easy for IT stocks to outperform the market hereon. They have customers in the US and Europe and they are under pressure,” Arora remarked.

Nifty IT index is down 27 percent so far this year thanks to a string of low margin announcements and emerging headwinds for the industry. Though the company managements has assured that the impact will not be much on them.

Arora, who bought shares of Zomato recently, said he is going to hold on to it for a while now. The stock has zoomed impressively from its recent low but has again languished around Rs 60 level for a couple of weeks.

Arora added that he likes the low-ticket consumption space. “If interest rates have to go up in India…the impact of that will be on auto and real estate, and not on going to the mall, buying shoes or wedding dresses. The Indian economy is doing relatively better.”

What he doesn’t like is the consumer durables names. “Everybody wants to make ovens, TV and toasters. There is a limit to how many companies can do the same thing,” he reasoned.

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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first published: Aug 30, 2022 01:58 pm
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