In an interview to ET Now, Arun Thukral, MD & CEO, Axis Securities, talks about the volatility in the market and suggests some new areas where money can be made in the next few months.
Why have the markets gained even when the macro indicators are not favourable?
It has been seen that when markets wait for correction, it generally does not come. Therefore, when it was speculated that higher crude prices, a weakening currency, rising bond yields will disturb the market, it was saved by the consistency in retail, mutual fund and DII flows. Even though FIIs have been selling for the last few days, peoples belief in the India story has helped in keeping the market optimistic.
People have realised that if we are going to become a $5 trillion economy in next seven or eight years, then India is the place to invest.
Second, we have also witnessed that the market is not going up in a hurry. So, while there will be opportunities to buy, one should not take decisions in haste as jitters in the form of hawkish US Fed commentary, higher crude prices and not well distributed monsoon can bring some major worries.
Where do you identify these pockets of optimism? Is there more meat on the platter and could IT really be the dominant theme for the remainder of the year as well?
After looking at the results of TCS and the fact that digital services have become a substantial part of our lives, we can say that IT, including midcap stocks, have become a dominant theme for the year.
Apart from it, other pockets of optimism where money could be made in the next few months include auto and auto ancillaries, housing finance, NBFCs and the private banks with retail focus. Other money making sector includes textile and chemicals where due to low labour costs, talented and educated workforce, India has become an attractive destination.