Devina Mehra positive on Indian stock market, says sentiment is low but opportunity high

Stock market veteran Devina Mehra is positive on the Indian markets as the general mood is downbeat. She said that market players have started to list out risks, over taking about the India growth story. "It means that the overall sentiment is negative, so it is time to buy," said the chairperson and managing director of First Global in an exclusive interaction with Business Today.

Explaining her rationale behind it, she said that sentiment is a contraindication in probability terms. "When people are feeling good, the next period returns are below normal and people are not feeling good, the next period returns are above normal. India, US, Portugal, Brazil and other markets have shown the same results.," she said.

The ace market experts said that when people expect supernatural returns from equities, it is time to be careful. It is the exact opposite of what your brain is telling you, Mehra said during the interaction on the sidelines of Indian Options Conclave (IOC) in Surat, hosted by Jainam Broking.  

Outlook on IT stocks

Commenting on the recent route in the IT markets, Devina Mehra believes that Indian tech companies will be able to pivot their business model. However, she is less positive on IT as a major driver of employment. She believes that this will not be a case for at least some time.

"If you look at all previous history of technology, right from the time when you automated yarn spinning and weaving, from then till now, when banks were getting computerized, there were so many strikes and all that. All the things that bankers do, you automate everything. Earlier, ledger and passbooks were handheld but now, all those things are gone. But banking is now employing a lot more people than it used to. And this has been the case in every technology in history," she said.

She sees some pain and sees IT sector moving towards a less people-intensive model. IT services have been the big driver of employment in India for the last 25 years, both directly and indirectly. She sees some impact of food services, real estate and other sectors, which may be dented by job-loss jitters because India is anyway doing so poorly on employment in the first place.  

Commodity markets

Mehra sees non-ferrous metal or base metals are a reasonable bet to take. The flip side to base metals is that its bull market is something that most people do not like because there are many more users of base metals than makers of base metals. So, when prices of steel, aluminum, copper, and others rise, there are enough people who don't want it to go up," she said.

Unlike most other bull markets, the commodity bull market hurts a lot of users, which is a much bigger population than the makers of any commodity, Mehra said. There is a lot of pressure. "Commodity bull markets don't last very long."  

Views on Indian market

Reiterating her views, Mehra said that she is positive on the domestic stocks as the sentiment is low. "We are somewhere around the market weight on the Indian market. You are more likely to be better than 2026. Whatever one has, investing in equity should be something that is not required for at least 7-10 years. Investing and staying invested for the long-term is the key," she concluded.