Adopt ‘wait and watch’ strategy, markets to trade in range of 11,600-12,000, says Zerodha co-founder

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Published: July 2, 2019 1:03:44 PM

With slowdown hitting the economy, the broader industry seems to be slowing down, said a market expert.

Sensex, Nifty slip, sensex highs, RBI monetary policy, sensex Selling pressure, Nifty, RBI, Monetary Policy Committee, Shaktikanta Das, rbi policy rate, Inflation, oilThe government must soon introduce reforms particularly in the automobile and manufacturing sectors, Nikhil Kamath said.

With slowdown hitting the economy, the broader industry seems to be slowing down, said a market expert. So as to revive it, the government must soon introduce reforms particularly in the automobile and manufacturing sectors, Nikhil Kamath, Co-Founder & Chief Investment Officer, Zerodha told Financial Express Online. The investors must adopt a ‘wait and watch’ strategy since the markets are  expected to be largely range-bound in the range of 11600-12000, he also told Ashish Pandey of Financial Express Online while sharing his investment strategy going ahead.

Here are the excerpts of the interview:

Markets have sustained themselves despite deep correction recently. What are your expectations, especially ahead of the budget?

I expect the markets to remain range-bound under the 12000 levels leading up to the budget. The markets have factored in reform to a certain extent,  and would only react if any systemic reforms come through. STT reduction/ or for it is written off as a tax input remains on top of the wishlist, a significant reduction in STT will aid price discovery and make the markets efficient.

What is your strategy for investors? Share your top picks?

The strategy we are adopting is to wait and watch; we expect the markets to be largely range-bound, in the range of 11600-12000.

Share your expectations from the upcoming budget? 

The Securities transaction tax (STT), was originally introduced in 2004 by the then Finance Minister P Chidambaram to stop the avoidance of capital  gains tax. We expect the current government to overthrow that rule.

What are your expectations from the company earnings for Q1FY20?

STT remains the biggest expectation for the stock markets; on a broader level industry across the board seems to be slowing down. Reforms in Auto, Manufacturing, Realty might be the need of the hour.

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