Amit Khurana of Dolat Capital is bullish on cement as he feels the sector will be among the key beneficiaries of an uptick in the economy.
The market has already priced in a 25 basis point-hike in interest rates by the US Fed next week, says Amit Khurana, Co- head Equities & Head of Research, Dolat Capital Market.
The best case for the Indian market would be the Fed not hiking rates and sounding dovish in its outlook, which in turn could prompt the RBI to cut interest rates by as much as 50 basis points, Khurana tells CNBC-TV18.
However, the possibility of that is slim, he says.
While the market has shown signs of recovery in the last few sessions, Khurana expects it to be volatile near term.
He is bullish on cement as he feels the sector will be among the key beneficiaries of an uptick in the economy. Among midcap cement stocks, he likes JK Lakshmi, JK Cements, and among large caps, UltraTech Cement is his preferred bet.
He is also bullish on consumer discretionary, and likes stocks like Asian Paints and ITC, which he feels will benefit from falling inflation.
He is bullish on Shemaroo as he feels demand for entertainment content will increase because of 4G.
Below is the transcript of Amit Khurana's interview with Latha Venkatesh and Ekta Batra on CNBC-TV18.
Ekta: We were talking about the big cues coming up next week. In your sense if in case the consumer price index (CPI) data is better than expected, do you think that it could possibly take away some of the sting that could come from the Fed and we might not be as volatile as expected possibly next week?
A: I don’t think that will be the case. Let us look at the sort of contradictory forces that will probably operate next week. We expect the data to be pretty muted in a sense that it will support the cause for a pretty strong case for a rate cut and I think given the market sentiment, 25 bps is very much in the price and in the expectations.
Whether the Fed raises rates and if it does not and gives a slightly off the hawkish mode of commentary then whether that builds up a case for 50 bps rate cut in India is something that we have to watch out for but I believe that is not in the consensus and therefore probably it is too early to talk about that.
I would sense that we have seen this in later part of the week, the volatility has come off quite considerably but I would expect this to start playing its role again next week onwards. So I think there is still some more time that we need to spend in a volatile market behaviour.
But having said that, I think the downsides are getting more and more protected in that sense as we go along because the valuations have turned around quite reasonable across sectors and in some of the cases quite attractive as we see it.
For full interview, watch accompanying video...
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