Moreover, collections from goods and services tax (GST) also don’t seem to be on an upward trajectory, he added.
Even as the market looks to turn around, based on the rally that has been witnessed on D-Street, market experts are cautious about developments that could lead to volatile moves.
“It has been a good start to the global earnings, but a few things are also worrisome. There are elections next month, which could lead to some volatility in the markets. Secondly, the RBI’s goldilocks scenario of good growth and low inflation may also not play out,” Andrew Holland, CEO, Avendus Capital Alternate Strategies told CNBC-TV18 in an interview.
Further, Holland also sees some downward cues on the macro front, which could pressurise some aspects of the market.
For instance, he sees oil touching the levels of USD 80 per dollar as well as a further depreciation in the rupee to 67/USD levels. Moreover, collections from goods and services tax (GST) also don’t seem to be on an upward trajectory, he added.
So, overall, the next 12 months could be volatile, but focus shall also be on earnings. “The earnings growth is seen around 15 percent and the market should be in line with these (levels). The GDP growth for FY19 is also seen around 7 percent,” Holland told the channel.
Speaking on different sectors, Holland believes that the way to play financials is via private banks as well as NBFCs.
“They will take the market share from PSU banks. The less negative news for PSU bank comes in the form of Electrosteel news. The resolution does give hope that the banking sector will get through NPA issue,” he added.
Holland believes that the worst is over for the sector. He sees tailwinds from the weakness in rupee as well.
MetalsThis area is quite interesting among sectors, especially with trade war fears ebbing now. The prices are set to rise in those cases. The trends are already visible in aluminium prices too.