India is facing macroeconomic headwinds with a phase of rising crude prices, uncertain revenue collection, higher fiscal deficit, overvalued currency and rising current account deficit, said Aneesh Srivastava, chief investment officer, IDBI Federal Life Insurance, in an interview with Sangeetha G. According to him, changes in the monetary policy stance of global central bankers, expected contraction in balance sheet size and trade restrictions are global headwinds for markets.
From the recent high of 11,171, the Nifty has corrected more than 9 per cent. Corrections are even sharper in the midcap and smallcap spaces. The recent corrections have taken some froth out of the market and valuations seem more attractive, said VK Sharma, head PCG & capital market strategy, HDFC Securities, in an interview with Ritwik Mukherjee. He thinks that recent positive economic data like GDP, manufacturing PMI, auto sales and growth in IIP are also suggesting higher earnings growth in the years going forward. Excerpts:
For the primary market, the last tow-three years have been fantastic as a number of good quality companies and new themes and sectors hit the market, said Chandresh Nigam, managing director and chief executive officer, Axis Mutual Fund, in an interview with Ravi Ranjan Prasad. The pipeline continues to look good in 2018 as well, he remarked. Excerpts:
How would you analyse performance of the market and the economy in FY18 that saw full-blown impacts of demonetisation and GST rollout?
The Indian economy is likely to go through a political and structural shift in the next few months. It needs to expand spending ahead of elections but needs to keep its fiscal deficit and inflation expectations under control. How the government manages to balance the demands of economics and the reality of politics will eventually determine how the Indian markets pan out during the year, said Mayuresh Joshi, fund manager, Angel Broking, in an interview with Sangeetha G. Excerpts:
Valuations are a function of sentiments, interest rates (and hence P/E ratios) and earnings trajectory. Though our market looks slightly overvalued for the time being, if inflation and interest rates come under control around June /July and the US 10-year bond yields abroad don’t stay above 3 per cent for long, then our valuations may not undergo a sharp de-rating, said Deepak Jasani, head (retail research) at HDFC Securities, in an interview with Ravi Ranjan Prasad. Excerpts:
The market is quite overvalued from a historic perspective and if it has to sustain at these levels then we should have over 7 per cent gross domestic product (GDP) growth. If the growth is below 7 per cent, then the market may not be able to sustain these levels and we could see corrections, said Mihir Vora, CIO Max Life Insurance, in an interview with Ashwin J Punnen. Thus the next couple of quarters are crucial, he added. Excerpts:
What is your general view on the market?
Instead of multi-baggers, investors should focus on investing in great businesses in a fast growing industry with dynamic managements and hold them for a longer term, said Tarun Birani, founder and CEO TBNG Capital Advisors, in an interview with Sangeetha G. This will give them a favourable reward-to-risk return, he added. Excerpts:
During the past few days the market has been volatile. How do you see the reaction of the market to the PNB fraud issue?
Talking about recent sell-off in the global equity market on hardening of the US bond yields, Rajeev Thakkar said equities have rallied on the back of low rates and high liquidity, the fear of this changing seems to have led the sell-off.
While some churn in stocks can be fairly expected before FY19 starts, as investors realign their portfolio, the LTCG pressure on stocks is likely to be limited, said Anand James, chief market strategist at Geojit Financial Services, in an interview with Sangeetha G. But it’s important to note that even with the 10 per cent LTCG, equities’ return so far is still much more attractive than what you might end up with other asset classes like debt, real estate or gold, he added. Excerpts:
How do you rate the budget for 2018-19?
The market is riding on strong macroeconomic fundamentals and this growth would continue, giving retail investors an opportunity to participate in this growth, says Arun Thukral, MD & CEO, Axis Securities. In an interview to Sangeetha G, Thukral says the pace of NPA revival is critical for the economy’s revival. He also believes Jerome Powell as the US Fed chief will be good for the Indian market.
How do you evaluate the Q2 earnings season?