Indian benchmark indices so far have rallied 20 percent post Budget and has ignored even the Brexit event. However, UR Bhat, Director, Dalton Capital Advisors says one cannot easily wish away the Brexit issue because the market has not been supported by foreign inflows but could be more on account of leverage plays and speculative build-up. Even though there are incremental positives coming out of Delhi in terms of 7th Pay Commission, the likely passage of GST, most of these positives are in the price and with global uncertainty likely to continue, one need to be cautious, says Bhat. The biggest risk to the market is lack of FII inflows because post Brexit, there could be leadership changes in the UK which could lead to a risk-off, especially for emerging markets, so one must position oneself accordingly. Currently, valuations in our market are over the top and the only place to hike could be domestic-driven companies, industrials, private banks etc., says Bhat. According to him, most analysts are neutral on IT, where they expect margins to contract in first quarter. With regards to pharma, he says, although an immediate rally is not on the cards, it will give reasonable returns over the next 2-3 years. PSU Banks as a theme too will play out over the next few quarters, says Bhat. Oil & Gas space, too, will benefit from steps taken by the government towards deregulation, says Bhat, adding that he is positive on oil marketing companies.
0 comments:
Post a Comment