Companies that have strong earnings visibility will protect the capital better, Enam Holdings Investment Director Sridhar Sivaram said on February 22, as the Indian market closed in the red for the fifth straight session.
Indian shares that opened low managed to pare some of the losses but still closed around 0.6 percent down from the previous day as the escalating Russia-Ukraine crisis spooked the market.
Sivaram spoke with CNBC-TV18 on the situation in Ukraine, its impact on the Indian market and what should be the investor strategy to tide over the crisis.
Markets cracked as the Russia-Ukraine standoff intensified but that was not the only reason for volatility, as stocks have crashed on many other occasions due to persistent inflation, he said.
Also read: Gainers & Losers: 5 stocks that moved the most on February 22
He hinted the recent sharp rally in the market was an exception. "After a sharp rally, there is a pause which is healthy," Sivaram said, adding he was optimistic about the future and FY23 as well as FY24 were looking.
Offering advice on protecting capital, Sivaram said, "We prefer value over growth. Companies that have strong earnings visibility will protect the capital better. Damage will be far lesser", adding there will be a correction in stock prices based on global corrections.
Sivaram said he was bullish on PSU banks, financials, chemicals, commodities and telecom.
To a query on how he would view the US Federal Reserve backing an interest rate hike in March and its impact on the financial markets in India, Sivaram said the rise in the Fed’s rate would depend on inflation.
Also read: Faster pace of US monetary tightening may pressure emerging market currencies, says Fitch Ratings
"In the early stages of a rate hike, generally markets do not do well and only when the picture gets clear, stability will pick up," he said.
Sivaram foresees good investments coming in for the commodities sector and said the auto segment would be lucrative in the second half of this year.
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