While there has been a bounce back across the globe, there needs to be a trigger on the macro level to scare away the bears. What do you think that would be and do you see it emerging anytime soon? Or are we looking at speed bumps along the way and mild bouts of recovery?
Clearly the market is looking for some sort of a trigger and the big positive or the silver lining is that the quarterly numbers which have been announced so far have been by and large good. Almost about 25 Nifty companies have delivered numbers and by and large these numbers have been good and we are seeing about 26% kind of growth at a PAT level and most of the companies are seeing better performance and some upgrades.
So barring within the Nifty universe, most of the other companies have delivered good numbers – be it Suzuki or , , Kotak , and so on and so forth. As long as the earnings picture is not deteriorating and we are not seeing major downgrades, that could be one important factor to bring in stability for our markets going ahead.
What are you advising clients? It might be too late to tell them to take cash off the table. What is the advice you are giving?
The investors who have some liquidity should be using this dip to nimble into some of the names, particularly the categories, which are not so directly affected by the high inflation and the high interest rate environment. The banking or the technology space are not going to see any material impact. We do think that having seen such a sharp selloff in both IT and banks, one could really look to buy into it in a staggered way for investors.
For traders, there are opportunities on the short side also and as we are seeing that the major trend is reversed. One could look out for opportunities to short in the metal space and a whole host of midcaps which had gone up so much and getting such high valuations. There are opportunities to short there.
Overnight we have seen the recovery in the tech stocks led by the heavyweights like Apple, etc. Back home, a lot of jokes have been made about how costs less than a kilo of tomatoes! is barely hanging on to 500, Nkyaa was down 7% yesterday. Are these good entry points or are these stocks going to fall a lot more?
Clearly the best part of the sentiment and valuations is behind them. It may so happen that because of the carnage, some people may just try to clean up their positions as the stocks are showing a lot of downward pressure. I think that it will take a lot of time for some of these companies to come back into vogue and for small allocations, it makes sense to look for maybe a or a…