Domestic benchmark indices have fallen more than 7 percent from their record highs in October 2021.
Atul Suri, chief executive officer at Marathon Trends Advisors, expects global commodities to rise 12-13 percent further in the short term with Brent crude oil futures likely topping the $ 115 per barrel mark.
In an interview with business news channel CNBC-TV18, Suri expressed his concerns over the impact higher commodity prices will have on corporate earnings over the next few quarters and on inflation.
The veteran asset manager believes that the trending market of the past two years is now behind and investors should brace for consolidation. “We had a trending market for two years, but this year it will be a trading market. It’s going to be a tough year with muted returns,” he said.
Market LIVE Updates: Indices trade in the green, Nifty around 17,200; realty, power rise
Domestic benchmark indices have fallen more than 7 percent from their record highs in October 2021 due to concerns around aggressive interest rate hikes by the US Federal Reserve and geopolitical tensions in Eastern Europe.
Inflation, too, has been a major driver of market action, especially, in global markets. In the US, inflation has hit multi-decade highs while similar trends are visible in the UK and Europe due to higher energy prices.
Suri argued that 16,410 points will act as strong support for the Nifty 50 index in the current consolidation phase although he is concerned by the sell-off in the smallcap space. Nifty Smallcap 100 index has corrected more than 15 percent from its recent high with individual stocks falling more than 20-30 percent in the same period.
“I think this pain is mostly going to be visible in the smallcap space and this is significant as it concerns retail investors,” Suri said.
Suri expects global markets to remain turbulent due to the ongoing Russia-Ukraine crisis and impending rate hikes from the US Fed and while he does not expect the Indian market to be insulated, he sees it holding in better stead than peers.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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