The Indian markets have corrected sharply from their peaks and therefore there is an opportunity to invest at this juncture. However, one should not be greedy and go all over in the market, as it is difficult to assess the intensity and duration of the pandemic and its exact impact on the economy," Ajit Mishra, VP Research at Religare Broking said in an interview to Moneycontrol's Sunil Shankar Matkar.
Q: What are your thoughts about the way forward for the market?
Markets managed to recover the losses significantly last week but it was largely due to the extreme oversold positions and scheduled derivatives expiry. Needless to say, markets are in a downtrend and the benchmark index, Nifty, has been witnessing move of roughly around 650+ points move in a single day.
The coming week is a holiday-shortened one and we do not see this volatility easing anytime soon. The probable range for the Nifty index could be 7,600-9,500 zone.
Q: Do you think the steps announced by the RBI will help the market and the financial system in the short term?
The measures announced by the RBI are a big positive for the entire financial system. This would ensure that liquidity needs are met and would ensure stability. Further, the measures announced by the government are a step in the right direction however more such steps would be required from the government to reduce the impact of Coronavirus on the economy.
Q: Globally there has been a sharp rise in infected cases, especially in the US and Europe. Do you think there will be a global recession in FY21-22 due to lockdowns?
The sharp rise of cases in the US and Europe has led to the lockdown of certain parts. In our view, there is a strong possibility that global growth would take a big hit in FY21E leading to a global recession. For FY22E, central banks and government's measures across the globe would dictate how fast global economic growth can return to normalcy.
Q: FIIs turn buyer for the first time on March 27 after consistent selling in previous 23 trading sessions. Do you think the overreaction from FIIs is done now or it is just a temporary break?
FII sentiments may have turned positive for Indian markets after the government announced relief packages to deal with the economic crisis as well as the RBI announced various measures to address financial stress in the economy. We believe positive FII flow may be temporary, as the flow would depend upon how Coronavirus further pans out affecting the global and Indian economy.
Q: Most of analysts say it is time to start becoming greedy. Do you agree?
The Indian markets have corrected sharply from their peaks and therefore there is an opportunity to invest at this juncture. However, one should not be greedy and go all over in the market, as it is difficult to assess the intensity and duration of the pandemic and its exact impact on the economy.
We suggest investors should put 30-40 percent of their investable corpus in fundamentally sound stocks (with market leadership, strong balance sheet and cash reserves) which will be able to tide over these difficult times faster than others.
We are recommending stocks like HDFC Bank, HDFC, Britannia, HUL, Tech Mahindra and Infosys. In the mid-cap space, we are positive on Havells India, Voltas, Inox Leisure and Berger Paints.Disclaimer: The views and investment tips expressed by investment expert 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.