Markets seen sideways with negative bias: Rishi Nathany
Rishi Nathany, CEO, Dalmia Securities spoke to Abhishek Vasudev on outlook for various sectors.
Markets have started the August series on a positive note. How should one aproach the markets at current juncture? Which sectors are looking attractive from a short term perspective?
One should approach the market cautiously at this time. We are at a very crucial juncture, where any positive policy action could give a fillip to markets. However, if the current scenario persists, the markets could continue to drift sideways with a negative bias. It is very difficult to take a short term sectoral call, due to the current state of our markets. In case the markets rally on the back of policy action, rate sensitives could outperform, whereas in a sideways market, defensives would continue to be favoured.
Rate sensitives sectors are on the investors radar ahead of the Reserve Bank of India's policy review tomorrow? Which sectors amongst the rate sensitives is looking most attractive?
The sectors we would expect to do well among the rate sensitives are some of the leading private banks, engineering and capital goods and autos.
What is your outlook on the metals as they have been under-performing the markets since quite a long time now?
We do not expect metals to do very well going forward, since we are seeing global softening in commodity prices. However, this could change in case we get another round of global quantitative easing.
How should one approach FMCG and pharma sectors given their current valuations?
As I have mentioned earlier, these defensive sectors continue to enjoy a premium in valuations in these uncertain markets and most of them are quite richly valued. Having said that, till such time there is lack of clarity as to where the markets and our economy is heading, such sectors could continue to retain their attractiveness for investors due to their perceived safety.
What should be the strategy to approach oil & gas sector stocks at current levels?
There is quite a lot of regulatory and pricing uncertainty in this sector and therefore we would like to avoid most stocks in this sector for the time being.
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