Arvind Sanger feels midcaps, which have been negatively impacted by liquidity and corporate governance issue, are not going to outperform only on back of election outcome
As the counting of votes for Lok Sabha elections is taking place, the market would want confirmation of exit polls, Arvind Sanger of Geosphere Capital Management told CNBC-TV18.
On May 19, exit polls predicted the NDA may get around 250-300 seats in general elections, which means the ruling party may retain their power for another five-year term.
"BJP majority would be very positive for the market sentiment. Less than 250 seats for BJP might lead to a correction whereas more than 300 seats for BJP would result in a rally," Sanger said.
"The hope is that new government would hit the ground running from Day 1," he added.
After exit polls, the market rallied sharply on May 20 and hit record highs intraday, but failed to hold on to those gains and closed the next day in red followed by a positive close with marginal gains on May 21 as traders remained cautious ahead of final counting day.
Sanger said the new government needs to address the issue in financial and NBFC space.
He feels midcaps, which have been negatively impacted by liquidity and corporate governance issue, are not going to outperform only on the back of the election outcome.
He thinks it is a good time to buy quality midcaps. "Midcaps are virtually at record low valuations relative to largecaps."
"Infrastructure names look interesting in the midcaps. Stable government would be positive for infrastructure stocks," he said.Markets are not driven by a single factor. Hence one needs to be cautious of global and domestic macro headwinds.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.