India looks like a safe haven for investors and a much better place investment destination globally, says noted stock market expert Dharmesh Mehta, MD & CEO, DAM Capital Advisors.
In an exclusive interview with Udayan Mukherjee, Global Business Editor, Business Today, Mehta added that the markets will not test the bottom which it had seen earlier, because falling commodity prices will benefit India from this quarter onwards.
“We have had a decent monsoon so far. Inflation has also peaked. So, I doubt we will test the bottom. I think the market will remain flat for some time,” he said.
The macro-environment has actually benefited India in the last few months, and the worst is that the people were thinking of higher inflation and higher interest rate doesn't seem to be coming true. “So a little bit of pullback is based on softening of commodity prices globally and overall, I think the markets were oversold,” he added.
The market veteran further said the financial sector is in a good shape. He is reasonably bullish on the auto sector as well as the manufacturing sector. However, he is cautious about the sectors which are dependent on the global economy.
On being asked about his top picks among information technology, pharma, and chemicals, Mehta said he is optimistic about chemicals, subject to valuations, which are still very expensive.
Elaborating on the financial sector, Mehta said, “I will like to go into smaller banks, the private sector, especially, maybe bet 10- 20 per cent on that, but 80 per cent of my portfolio will be in the larger banks because they're still at a very good valuation.” He is also positive about private sector insurance.
On asset allocation, Mehta is upbeat about equities because, in India, growth is very good. One can get a lot of good companies at decent valuations, the market guru asserted.
He further mentioned that the overall liquidity available for India is very high. “I think the FDI flows will continue with the kind of government reforms and the PLI scheme we (India) have announced. So, FDI flow will continue in India. And, FII flows will start flowing in as soon as you see some kind of situation, a global situation getting solved.”
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