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On a day when the results of five assembly state elections will be out, Ajay Srivastava, CEO, Dimensions Consulting, spoke with Moneycontrol and shared his outlook on bulls taking charge on D street. The market also gave his opinion about markets recovering in the previous two sessions.
Keeping a bullish view on large names in banking, the expert said multiplex, retail companies, and fashion segments may open up since these have been for a long time pretty low in ratings.
“Sugar, cotton yarn, commodities, tea, and liquor industries will be great gainers after a long time as the rupee has depreciated significantly. This is a big boost for the exporters in the market. Exporting companies and the engineering industry will get a great boost,” Ajay Srivastava said.
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“Multiplex, fashion wear, retail are pretty low in ratings currently. It is time for their re-rating. Opening up of these sectors is the next bet for Indian markets. Rupee-dollar opens up a new vista for pharma companies. Their exports will be pretty good,” the expert observed.
Amid weak global cues, the Indian markets witnessed heavy selling pressure from FIIs. Reacting on this, Ajay Srivastava said such a significant rise in such a short period will make the banking segment uncomfortable.
Terming the current period in the markets as a relief rally, he said it is a great booster.
“One believes FII selling pressure would go down. This gives relief to the banking segment. The market was oversold to a large extent. Domestic liquidity is running very small for investment. I do not know how long this rally continues,” he said.
Sharing his outlook on the rising oil prices and its impact on domestic fuel prices, the market expert said if the rise in retail fuel prices is sharp, it will have a negative impact on consumption and also on the stock markets, and maintained that if price rise is moderated by the government, it will boost consumption.
“Will it be passed on totally? If passed on totally, we believe it will be negative to consumption and to the market. If prices are moderated, it will be a relief for citizens and will boost consumption. In an oversold market, one has to buy safely and not with exuberance. The next rally will depend on what the government’s stance is on oil prices and where the RBI stands on interest rates,” Ajay Srivastava said.
On risk returns and buying potential the current market offers to investors, he said commodity is the best place to stay at present despite volatility, also stated that correction is going to happen very soon.
“If investors are on commodity, they need to be there. It is going to cash flows for all commodity companies. No need for a sell-off. There is time for correction. It is a great place to be in,” Ajay Srivastava stated.
He maintained a cautious stance on smaller banks and on larger banks, he said they have pretty attractive valuations.
“Banking is oversold. With larger banks, one should be safe but smaller banks are not the place to be in,” he said.
