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The first month of the current financial year ended on a positive note with market crossing the 60K level again. While there was volatility during the month due to not so good performance of a few technology stocks, the market recovered during the last few trading sessions.
The good news now is that many fund managers are comfortable with the valuation and seeing attractive opportunities in the large cap space.
To decode the market further and give you clarity on equity markets, Cafemutual spoke to industry experts. Read on to know their views.
Chandraprakash Padiyar, Senior Fund Manager, Tata MF
Overview
Business activity in India may remain steady with positive tailwinds in the form of capital expenditure (both government and private corporate), healthy bank balance sheets and strong real estate momentum. However, global growth is slowing which may impact export-oriented segments of the market.
Crude price, US economic growth, discretionary consumption are the triggers to the market.
Businesses across sectors and segments of the market are likely to grow earnings at a healthy pace. Valuations have become reasonable post a prolonged time correction to some extent. Given this backdrop, performance is likely to be broad based over the next few years.
Sectoral views
Financial, telecom, utilities sectors are available at better valuation.
Recommended fund categories
Diversified funds like multicap, flexicap, large & mid cap along with small cap. One may also consider banking and infrastructure sector funds.
Sonal Gupta, Head of Research, HSBC MF
Overview
Slower global economic growth along with the impact of the sharp interest rate increase cycle could result in negative growth surprises going forward. On the positive side, moderation in global commodity prices from peak and stalemate in geopolitical situation provide some relief.
India seems to be more stable supported by improvement in domestic demand, government thrust on infrastructure and support to manufacturing. However, economic growth can be slower in FY24.
Valuations overall remain on the higher side especially in light of the higher interest rate now prevailing globally.
Sectoral views
Domestic cyclicals and constructive look promising for medium term.
Sumit Agrawal, Senior Fund Manager, Bandhan MF
Overview
April was all about volatility in technology sector. Markets will continue to focus on emerging trends from the current earnings season.
Given the recent volatility in the global markets and threat of recession in the global economies, we are keenly looking for management commentaries of companies for the next fiscal.
Two major triggers going forward will be inflation numbers and central banks’ decision on interest rates.
In terms of valuations, they have moderated but are still higher than the long-term average. In the midcap space it is still expensive. Some pockets of stocks in the small-cap space are looking attractive.
Sectoral views
Technology, large private sector banks and FMCG offer attractive opportunities.
Recommended fund categories
Large cap category would provide a good opportunity for active investors to identify leading stocks at reasonable valuations.
