More than the announcements in the Budget, the outcome of state elections going forward could have an impact on the market, and uptick in 10-year US bond yields, said Vibhav Kapoor of IL&FS.
The market today snapped 6-day gaining streak and closed lower in spite of late recovery. To discuss the week gone by and the outlook going forward. CNBC-TV18 in their special show Taking Stock spoke to market veteran Vibhav Kapoor of IL&FS and technical expert Ashwani Gujral of ashwanigujral.com.
Vibhav Kapoor said the market rally should be viewed from global market perspective since most global equity markets have moved up in a concerted manner largely because of liquidity, low inflation that is a Goldilocks type of scenario, so growth picked up everywhere.
Therefore, when global markets correct, similar move will be witnessed for Indian equity markets, he said.
According to him, it is always good to consider a risk-reward ratio while investing in equities. Going forward, the risk-reward ratio is in favour of moving to cash to some extent, since the correction as an when it comes could be violent.
In the last few days, there have been signs appearing globally that markets have had enough for the time being and so, they could move sideways or correct significantly.
Sector specific, Kapoor said they have largely been negative on IT space but the worst now seems to be over for the sector and from here on, things will improve. The space could be a market performer and an out performer over the next two years, he said, adding that rupee remains a headwind.
He is not very inclined towards PSU banks, said Kapoor.
Kapoor said more than the announcements in the Budget, the outcome of state elections could have an impact on the market. The other global risk for the market would be if 10-year bond yield in the US went above 3 percent, then all equity market could be impacted.For full discussion, watch video
India Union Budget 2018: What does Finance Minister Arun Jaitley have up his sleeve? Click here for live Budget 2018 news, views and analyses.