Talking about the market’s further outlook Alok Aggarwal, Head Quant & Fund Manager, Alchemy Capital Management It is said that there was selling by FIIs, GST collection growth figures being in single digit for the last 4 months and pressure in corporate earnings. At the same time, corporate numbers for December are also estimated to be of single digit growth. After the elections in the US, it is being estimated that some policies will be introduced where taxes can be cut and pro-growth policies can be introduced. Due to which there are outflows from the entire emerging market. In such a situation, if there was no slowdown in our country, perhaps its impact would not have been so bad. Due to the slowdown in the economy, its impact has been seen on the market.
He further said that correction was seen in the market during September to November. Large, mid and small cap sectors all showed a correction of about 11 per cent from their peak. More bounceback was seen in the broad market as compared to the large cap. Because the growth in the broader market was good. Alok Aggarwal said that as long as growth trades remain good in the broader markets, they will remain stronger than largecaps. It remains to be seen that in the near term, when there is a slowdown in the economy, then which segments are able to do better and those investing in the market should focus on those segments only.
The correction in the market is giving a better opportunity to invest in the long term. Because there is every possibility of a long-term rise in the market.
Still positive trade in IT sector
Talking about the IT sector, Alok Aggarwal said that the majority of the business in this sector comes from the US, so what kind of policy will be there in the US will have a big impact on the sector. It is expected that if there is a tax cut in the US, companies will have more money for discretionary spending. Due to which it is expected that discretionary spending may increase. It would be much better if the sector’s earnings growth shows upside. There is still positive trade in the IT sector.
Underweight view on largecap banking stocks
Largecap banking stocks have not fallen much from their all-time highs but are not able to outperform the overall market. The slowdown in credit growth in banks is having an impact on their profits. No major improvement is visible in credit growth, margin and credit cost. Due to which this sector may underperform. Our view is that the sector itself remains underweight.
Bullish outlook on power sector
We remain bullish on the power sector. There is a need to set up power plants in India, there is a need to improve transmission lines, due to which we are quite positive in the segments of generation, transmission and all the vendor companies associated with this sector. Power companies have become attractive in decline. He further said that he does not like oil and gas companies at the current price.
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