Sanjeev Prasad, Managing Director & Co-Head, Kotak Institutional Equities is of the clear belief that the market has to be looked at on the basis of stocks.
The challenge in the last 12-24 months has been that the good quality names continue to be expensive and haven't really corrected, be it the names is spaces like consumer staples, discretionary or the private retail banks but what has become cheap are names that are not of great quality.
So the big question is what do you do in a market like this because the worse has not yet played out, says Prasad, adding that the macros haven’t improved and the domestic political uncertainty has also increased.
Now, we have the global trade issues to further dampen market sentiment, he adds.
“Doesn’t look like the worst case situation is factored in,” says Prasad, adding that we could be in a dead zone for now.
However, on other had if the oil prices cool off to levels of USD 60 per barrel over the next few months then the macros of India will start looking better and many of the names that were hammered in the metals space, private corporate banks could bounce back. Next month we might also see resolution of some of the NCLT cases from first list, we could see sentiment change for some stocks.
Some other pointers
If we see asset resolutions over the next few weeks, then one could see tremendous value in corporate facing banks like ICICI Bank.
Indian macros very unclear at this point in time. Important is pick-up in GST collection. Good collection could boost bond market sentiment and bond yields could cool off provided inflation does not rise and RBI does not raise rate.
Seeing some signs of economic recovery.
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