Markets will take a breather after this massive run up. Since the upswing was very swift, for now, markets have topped out. They will witness some consolidation and then see a reversal, Umesh Mehta, Head of Research, Samco Securities, said in an interview with Moneycontrol’s Kshitij Anand.
Q. It was a historic week for Indian equity markets with gains of nearly 3 percent for the week ended November 1. What is your view for markets in the coming week -- will Nifty50 hit a fresh record high or have we topped out?
A. Markets will take a breather post this massive run up. Since the upswing was very swift, for now, markets have topped out. They will witness some consolidation and then see a reversal.
A fresh record high immediately seems unlikely, however, post significant correction markets will move up higher again. It will be a rest phase before climbing newer highs. Hence, currently, a top out look to be the near-term outlook.Q. What is your view on the latest auto sales numbers which have come out for the October month? Do you think things have bottomed out for the sector and it could well turn out to be a dark horse in 2020?
A. No, it is too early to take that call whether auto stocks have bottomed out since heavy discounting and inventory push had led to bargain buying by consumers.
But, this trend may not necessarily continue for the next few months given that the Government has done little to incentivise consumers/individuals, although they have very well incentivised corporates in the form of tax cuts.
Therefore, nothing concrete should happen till the Budget next year except if the scrappage policy is implemented which can be a huge savior. Investors should avoid these stocks for now.Q. Any important events which one can watch out for the month of November which could dictate the near-term trend?
A. In India, domestic corporate numbers will dominate the bourses but internationally Trump’s impeachment will be a key event to watch out for.
Additionally, the geopolitical situation in the Middle East and escalation in the China-US trade talks can turn the sentiment around in India as well as in global markets.Q. How is the November series likely to pan out for investors? What are the bright spots if we look at the October series rollover data? Stocks that are likely to be on the list of bulls and stocks which are likely to remain in the grip of the bears?
A. Private sector banks, pharma, FMCG are likely to correct in the November series as they have bounced back from their lows and are more susceptible to corrections than the general market.
On the other hand, outperformers can be cyclical such as metals and cement stocks which can give a positive surprise in the next series.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.