The stock markets were on a bull run for most part of the second half last year, and constantly printed new highs. However, for the markets to reach new highs, an uptrend in corporate results and clarity on 2019 elections verdict is much needed, said Nilesh Shah.
Sensex and Nifty witnessed a huge turmoil earlier this month. Sensex fell nearly 1,500 points in the first week, and Nifty too reached a low of 2018. On 6 February, extremely volatile trading sessions were observed as the volatility index (VIX) soared 44.23 percent in the intraday trades, and struck a 52-week high of 23.1575. Once again on 8 February, the sell-off returned. In wake of such volatility existent in the markets, investors are confused over how to go about investing in the stock markets. The investors are also concerned about how 2018 will fare for them going ahead. “The year 2018 will be a year of volatility,” Nilesh Shah, MD, Kotak Mahindra AMC told CNBC TV18. The stock markets were on a bull run for most part of the second half last year, and constantly printed new highs. However, for the markets to reach new highs, uptrend in corporate results and clarity on 2019 elections verdict is much needed, said Nilesh Shah.
The IT sector is likely to do well this year, backed by depreciating rupee and large orders, he added. The transition process for large Indian companies is still work in progress, he said. Even the consumption and rural themes will do well going ahead, he added further. In the present market scenario, investors need to pick up bottom-up stocks rather than top-down this year,” Nilesh Shah advised. Barring public sector banks, results for all other companies were in-line this quarter, he said.
In an earlier interview with ET Now, Nilesh Shah had said in wake of the latest correction in the markets, overall valuations have become fairly reasonable. However, non-quality stocks, which he termed as ‘ kachra’ will correct more steeply, he had said. The fiscal slippage and surplus borrowing program are the primary reasons behind the rising volatility in the markets. Even the global interest rates, which are constantly rising are fuelling volatility, he said in the same interview. The expectations over the US Fed rising the interest rates any time this year has also left the bond yields soaring and adding uncertainty in the markets.