Stocks that represent the domestic economy better and owned less by foreign institutional investors (FIIs) are good bets at this juncture, said Saibal Ghosh, chief of investments, Aegon Life Insurance Company. In an interview to Nishanth Vasudevan, Ghosh said there is a possibility of a rate cut after the Budget. Edited excerpts:
Has the market bottomed out or is there more pain left?
The reasons behind the recent turbulence are more global than local. Despite India being a consumption driven economy, there is a disconnect between the economy and the market. More than half of BSE100 top lines are not really rupee denominated while almost half of the earnings of Nifty are directly linked to global factors. I am also hearing that the proposed SEC's fiduciary standard rule that is expected to kick in sometime in the middle of this year in the US, will further discourage selling of riskier assets like emerging market equities. The situation will not reverse overnight. We have to face the volatility.
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