The IT sector would remain to be a market performer over the next 12-18 months, Upadhyaya said.
The information technology (IT) sector would remain to be a market performer over the next 12-18 months, said Harsha Upadhyaya, CIO Equity, Kotak Mutual Fund, adding that the earnings for the space are likely to be in-line.
Upadhyaya is of the view that the market will likely consolidate at its current levels and remain rangebound. "Overall the set up for the market is mixed wherein, on one hand, while the global cues are supportive, the local cues are not," he said.
Globally, there seems to be some progress in US-China trade talks and there are indications from European Central Banks that there could be a further stimulus to help sagging global growth or European growth. Moreover, the Fed is also expected to be dovish in their statement tonight and crude is at a reasonable level of $60 per barrel, he added in an interview with CNBC-TV18.
However, locally, the NBFC sector is facing a big credit squeeze issue and so many businesses are finding it difficult to borrow money, which in turn is putting pressure on our economic growth as well as corporate fundamentals, he said, adding that there could be question marks on the overall earnings growth trajectory on back of a slowdown in consumption.
Sector-specific, he said the house is underweight on NBFCs and sectors dependent on NBFC driven funding.
According to him, one cannot still go a 'buy' aggressively in the consumption-driven spaces like autos, consumer durables or fast moving consumer goods (FMCG).
However, in spaces like infrastructure or investment led sectors, there is a reasonable degree of visibility, he said.
The house is 'overweight' on financials, industrials, gas utility and cement. Within financials, the focus is only on private sector banks and some insurance companies.
When asked about the recent issues with regards to debt mutual funds, he said, “Most of the debt investors are worried because unlike equity investors the debt investors did not expect a write-down in their portfolios. It will be a while before they get back confidence and so advisors will play a large part.”Source: CNBC-TV18The Great Diwali Discount!
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