[ad_1]
In an interview with ETMarkets,
said: “Active investors can look to invest through direct equity in sectors like chemicals, consumer durables, auto, capital goods and other consumption-oriented sectors” Edited excerpts:
The month of September started on a volatile note. It looks like the market is moving in a range where 18000 is turning out to be a big resistance. Where are markets headed?
Over the last 5 years, Indian stock markets have generally been subdued in September but data shows that it was positive 59% of the time in the last 22 years.
With encouraging economic indicators, I expect the markets to consolidate a little more and move up eventually.
The tapering inflation and the upcoming festival season could provide a shot in the arm for better sales and profit growth across companies, delivering better earnings growth in the coming quarters.
Investor interest continues to be positive as MFs are flooded with SIP flows which must be deployed sooner than later.
In the last few years, DIIs were able to negate the FII selling pressure to some extent and with the recent FII interest, the market is likely to make its next up move soon.
We have more than 11 cr retail investors registered on the BSE website. And, the good part is that most Tier II and Tier III cities are seeing strong growth on a YoY basis when compared to metros. What does your channel check suggest?
The user addition peaked out in October 2021 when Nifty reached a peak of 18600. For us, most of the users came from Maharashtra and North India and in particular Delhi/NCR region which registered the highest growth in the last 18 months akin to the user additions across the industry.
That said, we continue to add thousands of users every month and expect our user base to grow 2X in the next 12 months.
What is powering the capital gGoods sector which was on buyers’ radar in the last month?
The Indian economy witnessed a sharp revival post the Covid lockdown of FY21, and continued its uptrend despite the omicron scare, supply chain issues like semiconductor shortages, high raw material and logistics costs, and worries of high inflation.
Revenue growth for product companies was largely led by pricing, with multiple rounds of price hikes in the last two quarters.
With Atmanirbhar Bharat, PLI schemes and other progressive initiatives including enhanced government spending, the timely policy measures provided the necessary impetus.
Key economic indicators like the Goods and Services Tax (GST), manufacturing PMI, core sector growth and export data displayed positive traction.
Backed by these positive tailwinds, investors opted for capital goods stocks across the spectrum – defence, engineering and construction, electrical equipment, castings and forgings sectors.
The S&P BSE Capital Goods index did deliver superlative returns – 11.7 per cent in one month, 22.3 per cent over three months, and 29.7 per cent over the last year.
The strong Capex revival in the capital goods sector is likely to continue in the coming quarters.
IT stocks continue to suffer. What is pushing tech stocks lower and are they now available at attractive valuations after the recent fall? Any stocks which investors can look at for the long term?
World over, technology stocks delivered unmatched returns during the earlier years – CY20 and FY21, buoyed by work from home concept, higher budgetary allocations by companies due to low-cost funding, high sales and margin growth.
Enticing investors with large buybacks and dividends, most technology-related companies entered into an extremely overvalued territory around the second half of the last financial year.
Since Oct 2021, with the U.S. Federal Reserve deciding to reverse the rate cycle, this sector has seen a sharp correction in valuations. The expectations of subdued cash flows and lower dividends, coupled with higher wage cost inflation have resulted in a tech sell-off in the US as well in the rest of the world.
Investors continued to move away from highly valued and overpriced sectors to value-oriented segments of the market. Nifty IT Index is down 28% year-to-date, with sharp cuts in stock prices across large and mid-cap companies.
At present, the valuations are comparatively better, but not compelling enough to take a serious interest for substantial investment. Another bout of correction, around 10%, would make the investors gravitate towards this sector once again.
Small & midcaps outperformed by a wide margin the last month – how should investors play this theme in the coming months?
After hitting all-time highs in October of last year, Nifty50 had corrected about 13% by June 2022. But the major correction during this period was seen in mid and small cap stocks with Nifty Midcap 100 index down 17.5 per cent and Nifty Small cap index falling 26 per cent from their recent highs.
This provided some comfort in valuations to investors and hence, appreciable buying interest returned soon.
Year-to-date, Nifty mid-cap index returns stand at a meagre 3.5% &d Nifty small cap index at (-) 13.8%, offering scope for better returns going forward.
Active investors can look to invest through direct equity in sectors like chemicals, consumer durables, auto, capital goods and other consumption-oriented sectors.
Passive investors on the other hand can look to take advantage of the upcoming earnings growth through various mid and small cap mutual funds.
Among the midcap funds, Mirae Asset Midcap, PGIM India Midcap Opportunities, Quant Mid Cap and Axis Midcap are some of the good and performing schemes.
From the small cap category, investors can opt for
Emerging Businesses, Canara Rob Small Cap, Quant Small Cap and Nippon India Small Cap, as these schemes have provided excellent returns over longer time periods.
Please share a little about yourself.
At age 16, I was hooked to the stock markets when I accidentally stumbled upon it on television. Since then, I have been passionate about markets, professional trading, investing and decoding the inside world of finance.
At the age of 18 I started trading and after experiencing the complacency of traditional brokerages in India, I decided to embark upon a journey to solve the problems faced by traders and investors.
In 2015, FYERS was formed as a crusade to change the way stock investments are made in the country and as a technology-focused brokerage firm, the goal is to transform the trading/investment landscape for everyone.
What stress? I’m running a company, not a country. When you look at other people’s problems, mine seem relatively tiny. If you look at a molehill in isolation, it seems large. When compared to a mountain, it’s insignificant. I believe that’s how one should manage stress if any.
Any changes you have made to your portfolio. If yes, what are the changes and why?
Moving out of debt instruments was the biggest change due to the foreseeable increases in long-term interest rates. I believe it is better to invest in equities in downturns or sideways markets than in a raging bull run.
What are the trend you are seeing in retail investors’ trading? Does the trend favour long-term investment, F&O, intraday trading or commodity trading? What is the pecking order? What could be possible reasons for the trend?
Cash market volumes are more volatile than F&O volumes. For example, ever since the market topped out on October 21, the number of investors in the equity segment reduced from almost 1.2 Cr. To below 80 lakhs on July 22.
However, the derivative participation is stickier despite the downtick in the cash market. The obvious takeaway from this data is that derivative traders are the more committed participants than the lockdown investors who were lured in by a big run up in stock prices.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
[ad_2]
Source link
