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The recovery that started in mid-June has extended to the end of August as FIIs returned to the Indian market after remaining net sellers for almost 9 months. Will the market continue to tread upwards in September too? What are the triggers that can affect the market in the near term?
Let's look at what experts have to say:
Chandraprakash Padiyar, Senior Fund Manager, Tata Mutual Fund
- Do not expect material correction from current levels despite high valuations. Reasons - Healthy earnings growth outlook and adequate liquidity available with institutional investors
- Valuation of stocks is reasonable in select pockets across market cap
- Market may remain range-bound in the short-term and is likely to deliver positive returns over the medium-to-long term
- An end to the Russia-Ukraine war can have a major positive impact on the market as oil prices will cool down
Mittul Kalawadia, Senior Fund Manager, ICICI Prudential AMC
- In the near term, there could be intermittent market volatility due to global inflation and contracting economic activity
- India is on a better footing as economic activity is back to pre-pandemic levels and structural growth drivers like reforms, demographics and foreign direct investment flows are now in place
- PSUs may do well over the next 2 years as they perform well in run-up to elections. Also, their valuations are more attractive and they offer better margin of safety
Ravi Gopalakrishnan, CIO - Equity, Sundaram Mutual Fund
- Commodity prices especially of oil is of immense interest to the market as any relaxation in oil prices will be a big positive for the economy
- At a time when the world is facing multiple challenges, India has strong growth prospects. This explains why Indian market continues to trade at significant premium to other emerging markets
- Post the March/April corrections, valuations became reasonable for several good quality businesses, particularly in the mid and smallcap space
Trideep Bhattacharya, CIO- Equities, Edelweiss MF
- Nifty50 has rallied 15% in the last couple of months but despite that there are pockets wherein valuations are still reasonable and earnings outlook remains strong
- Indian economy is on the cusp of a meaningful economic recovery in the backdrop of weak global growth over the next 12-18 months
- There are many positive signs for the Indian economy starting from early signs of capex cycle to strong festive demand to margin recovery in certain sectors.
Commentary on sectors
Chandraprakash Padiyar
- Manufacturing, capital goods, financials, telecom, consumer discretionary, real estate are some of the sectors that we are positive on for the next few years
Ravi Gopalakrishnan
- Investment and consumption are two key segments that will throw up many opportunities to equity investors. Within these, we are positive on banking and financial services, manufacturing and industrials, consumer discretionary and related segments
Fund recommendations
Chandraprakash Padiyar
- Larger part of the portfolio should be invested in diversified funds like flexicap, large & midcap, multicap and hybrid funds
- Also, the smallcap segment is attractive at present as it has many manufacturing-oriented companies which are likely to witness fast earnings growth
Mittul Kalawadia
- Investors should look at largecap funds as they are better placed than mid and smallcaps
Ravi Gopalakrishnan
- Investors should prefer flexicap as they provide the right blend of large, mid and small caps and gives the fund manager enough room to invest according to the prevailing market condition
Trideep Bhattacharya
- Flexicap is a good option for risk-averse investors for medium-term investment
- We recommend midcap and focused equity funds for 5-10-year investment
