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Weekly dossier: Adrian Mowat, Mark Mobius and others on market trends

The market, at this juncture, looks at a crucial juncture. It is trying to hold the psychologically important level of 11,000 while sharply reacting to domestic as well as global triggers.

September 26, 2020 / 09:25 AM IST

Key indices - Sensex and Nifty - broke their six consecutive sessions' losing streak with strong gains on September 26 indicating that bulls will not give up easily.

Sensex closed 835 points higher at 37,388.66 while the Nifty50 gained 245 points to end at 11,050.25.

The sentiment of the market was bolstered by reports of a stimulus by the government. Reports suggest the Modi government is just weeks away from announcing another round of stimulus measures aimed at creating jobs and pushing demand as it looks to turn around India’s ailing economy that saw its steepest-ever contraction in April-June.

Besides, the global rating agency, S&P affirms India’s ‘BBB-/A-3’ rating with a stable outlook. India’s outlook remains stable as the economy is expected to recover post-COVID.

The global rating agency expects India's real GDP growth to recover from fiscal 2021 onwards.


The market, at this juncture, looks at a crucial juncture. It is trying to hold the psychologically important level of 11,000 while sharply reacting to domestic as well as global triggers.

What should investors and traders do and what are the emerging trends? Top market voices share their views on the market:

Adrian Mowat, Emerging Markets Equity Strategist (to CNBC-TV18)

The Indian market has seen a narrow rally from its lows and that has also been the case in China, and in the United States.

Financials are reflecting much more of the economic damage and uncertainty that COVID has brought.

These stocks are weak because of the expectation of a delayed exit from the impact of the pandemic and lockdown, i.e. in 2021 or in the middle of 2021.

Mark Mobius, founder of Mobius Capital Partners (to CNBC-TV18)

We have been concentrating on the small and mid-cap which has been very lucky for us because of the recent orders.

But we are focused on companies that have no debt or very little debt and companies that still are able to grow earnings.

India still is the biggest in our portfolios now, which was helped by the big surge that we have seen recently.

It was among the top three even last year, but this year we are seeing India at the top of our portfolio.

James Sullivan, MD-Asia Equity Research at JPMorgan (to CNBC-TV18)

Earnings expectations in India have been brought down which sets the stage for more realistic conversations moving forward. So there is a short-term potential support there.

We are relatively cautious on emerging markets overall.

Ken Peng, Asia Pacific Investment Strategist, Citi Private Bank (to CNBC-TV18)

I do not think Indian stocks corrected much. Once the consolidation is done most of the investors will be looking to get back into the tech space – there is probably an opportunity there.

The travel and leisure type cyclicals are something that we are watching for as an opportunity to buy on dips.

Sanjay Mookim, Strategist, Head of India Equity Research at JP Morgan (to CNBC-TV-18)

The volatility in the Indian markets is completely joined with the ebb and flow of global equities. There is a risk that if any geography, such as Mumbai or Delhi, get a sudden ramp-up in COIVID cases and lockdowns come back, that will become a problem for local equities.

Jahangir Aziz, Head-Emerging Markets Economic Research, JPMorgan (to CNBC-TV18)

I don’t think that the second wave of COVID cases rising is a serious risk. If you look at growth rates, it is going to be a spectacular V-shaped recovery.

There is no doubt about it given the depth of the second quarter. We could end the year with positive manufacturing growth in the US.

Saurabh Mukherjea, founder, Marcellus Investment Managers (to CNBC-TV18)

in the private sector banks, we may see significant consolidation. So we are using this opportunity of nervousness in the public to load up further on the kings of capital, HDFC Bank, Kotak Mahindra Bank, Bajaj Finance.

The jitteriness is there and I hope it continues for the rest of the year because it gives investors like us a chance to buy the best lenders in our country at extremely attractive valuations.


Mahesh Nandurkar of Jefferies (to CNBC-TV18)

If you look at the earnings trajectory, what we are looking at is for FY22, we are looking at for Nifty as a whole about 35-40 percent earnings growth.

So, while we will be moving forward with a higher market level, so will be the earnings as well.

My sense is 12 months down the line, if the market is indeed up 12 percent, I think the PE multiples would actually come down and not up.

S Krishna Kumar, CIO-Equity, Sundaram Mutual Fund (to CNBC-TV18)

The FMCG sector is doing well. The sector may see reasonably good revenue growth and margins expansion for a longer period of time.

FMCG sector will see double-digit earnings growth. Considering the kind of free cash flows and the distribution they could do in terms of buyback etc, it is a pretty reasonable space to be in at this time when there is uncertainty around it.

Arvind Sanger, Managing Partner, Geosphere Capital Management (to CNBC-TV18)

With the sharp sell-off that we have had, I am not sure that there is a big amount of downside remaining.

There are near-term concerns about COVID, the stimulus package, global cases rising, global economic slowdown particularly in Europe, all causing some risk-off and clearly, the US fiscal stimulus hitting a rock.




Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Nishant Kumar
first published: Sep 26, 2020 09:25 am
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