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Despite volatility, the market remained somewhat flat last month. However, the election results are about to come and the possibility of stable government can lift the market sentiments from here.
We spoke to experts Abhinav Sharma, Fund Manager, Tata MF, Santosh Singh, Fund Manager, Motilal Oswal MF and Vinay Paharia, CIO, PGIM India MF who share their outlook on equity markets.
Abhinav Sharma, Fund Manager, Tata MF
- Post election results, markets will be focused on government policies related to capex, fiscal deficit and taxation
- Globally, the focus will remain on how the US Fed navigates interest rate inflation dynamic and developments related to Chinese economy
- Valuations are reasonable in the large cap space. In mid and small cap space, valuations are close to historical highs so one has to keep an eye on the earnings growth
Sectors recommended
- Promising sectors include capex-oriented sectors as India is in the midst of a multi-year capex upcycle. Another sector one can look at is manufacturing
Fund recommended
- Balanced advantage or multi-asset funds can be looked at this time
Santosh Singh, Fund Manager, Motilal Oswal MF
- The most important thing to look at this month is elections, otherwise, markets are expected to be flat with no major highs and lows
- Movement of the bond yields have to be tracked as rise in yield can bring a correction in the markets
- Valuations across market caps seem to be bit higher than average. There are some segments, which are highly over valued in mid and small cap
Sectors recommended
- Banking and financial sectors and IT sector look promising
Funds recommended
- Balanced advantage fund and large caps can be recommended at this time
Vinay Paharia, CIO, PGIM India MF
- Strong outperformance of low growth-low quality companies is expected
- Valuations of large caps and high growth-good quality small and midcaps are reasonable. However, stocks in micro bubbles like IPO companies, real estate companies, public sector enterprises and capital goods sector are likely to deliver very weak performance over the next few years due to inflated valuations
- One has to keep an eye on the results of the general elections. Apart from that, actions in monetary policy by RBI should be keenly watched and policies formulated by new government could be some things to watch out for at this time
Sectors recommended
- Healthcare, telecom and consumer discretionary sectors look promising
Fund recommended
- Large cap, large and mid-cap and flexicap funds are good for current times
