October 15, 2024
Financial Assets

stocks picks: Market to hover around current levels due to global volatility: Sudip Bandyopadhyay


“I do not believe that the Indian market will fall significantly. Instead, it is likely to hover around current levels for some time due to global market volatility. This volatility and consolidation at elevated levels are actually beneficial for the market’s long-term health,” says Sudip Bandyopadhyay, Group Chairman, Inditrade Capital.

What’s your take on the situation, given that this week we were amazed by the global events unfolding? It was carnage across the globe. However, things started to settle down, and Indian markets outperformed global markets during the past week. So, what is your take? What is the one trigger we should watch out for closely now? Do you think global events will have a massive impact on Indian markets, or are Indian macros stable enough for us not to worry?
Sudip Bandyopadhyay: The macros are stable enough, and I do not think we need to worry too much about what is happening globally. Of course, significant events, such as the large-scale unwinding of yen carry trades and weak US jobs data earlier this week, led to fears of a recession in the US. This resulted in a bearish mood among foreign investors, who sold off assets worldwide, including in India. Such events can lead to some negative market sentiment in India and a fall in Indian markets. However, as we saw this week, global markets fell much more sharply than India did, and India recovered quickly from its lows. The macro factors in India are strong.Additionally, the strength of SIPs (Systematic Investment Plans) has been increasing month on month, and there is also significant investment from HNIs (High Net-Worth Individuals), retail investors, and other sources.

Approximately ₹50,000-60,000 crore of incremental cash flow is coming from domestic investors every month, which is a substantial amount for the Indian market. This is being added to the Indian capital market every month. Moreover, global oil prices, despite geopolitical turbulence, have remained range-bound, which benefits India to a great extent.

Considering these factors, I do not believe that the Indian market will fall significantly. Instead, it is likely to hover around current levels for some time due to global market volatility. This volatility and consolidation at elevated levels are actually beneficial for the market’s long-term health.

Regarding your outlook on the broader market space amid this volatility and earnings swings, do you find more comfort in large caps compared to mid caps? What is your outlook here?
Sudip Bandyopadhyay: Definitely, I find more comfort in large caps. In any scenario with high volatility, I would recommend focusing on large caps. For large caps, there are significant opportunities and tailwinds in construction, infrastructure, and power sectors. I believe these three areas are good to invest in during periods of volatility and potential upward and downward movements. Quality stocks are available in these sectors.

In addition to these three, I would also recommend looking at the FMCG (Fast-Moving Consumer Goods) sector. Quarterly performances indicate that rural consumption and demand are returning, albeit slowly, supported by a good monsoon and the upcoming festive season starting in September. FMCG is a sector that has not performed well recently but is expected to improve.

Another sector to consider, albeit contrarian, is chemicals and agrochemicals, specifically specialty chemicals. This sector has struggled with issues such as Chinese dumping and lack of demand, but we believe the worst performance is behind us and that conditions should start improving from here.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *