The recent rally in the Indian stock markets has led many experts to say that a stock market correction may be in the offing. In an interview to CNBC TV18, Andrew Holland, CEO, Avendus Capital Alternate Strategies said that he’s actually waiting for a stock market correction. “I will wait for a correction in the market and that will happen for sure,” said Andrew Holland adding that he’s still long on the market even though the rally is driven by liquidity. Sandip Sabharwal, an investment advisor told ET Now, that the equity benchmark indices may correct in the range of 200-400 points, adding that a deeper correction may be unlikely. Many market experts had cautioned that the markets may see a correction, if earnings don’t pick up in the current quarter. In an interview to BTVi, Harsha Upadhyaya, Head – Equity investments for Kotak Mutual Fund, said last week that strong earnings will be necessary to sustain the rally.
At the same time, a few market voices have been saying that the rally will sustain, as its backed by better than anticipated earnings. In an interview to ET Now, Taher Badshah CIO (Equities), Invesco Mutual Fund said earlier this week, “One should dissect the earnings to see how many companies are actually over-delivering, or beating street estimates versus earlier. An analysis of the 35 companies of Nifty which have delivered results so far, 75% of them have actually beaten street estimates, or at least met them. This number was closer to 55% in the last four or five quarters. This is a better way to track earnings delivery versus expectation, and I believe on that front, things seem to be getting better.”
Yesterday, Teresa Barger, the co-founder and CEO of Cartica Management which manages more than $3.2 billion concurred that India is going through a quality rally. “ You had EPS growth, at least in the companies we like. This is a quality kind of rally. So, as longer-term investors we are not concerned about the hiccups,” Teresa Barger told CNBC TV18.