In an interview with ETMarkets, Jain said: “Investors should deploy at least 60% of their funds in equities at current valuation. However, they should choose the right sectors, so that they can create alpha on their investment,” Edited excerpts:
Indian market touched a fresh 52-week low in line with US markets post US Fed rate decision. Time to turn cautious or buy the fear?
Yes, the Indian stock market touched a 52-week low earlier in June when it hit levels closer to 15,200. In my view, this is the time to buy fear rather than sell in fear.
Investors should deploy at least 60% of their funds in equities at the current valuation. However, they should choose the right sectors, so that they can create alpha on their investment.
Do you feel that FIIs outflows could stabalise or reverse in H22022? There are talks that retail investors might not be able to keep on putting money if the economy goes into a slowdown/job loss?
In my view, FII’s selling is more technical rather than fundamental due to redemption pressure at their home country.
I can assure each Indian investor that, anyone who is selling the Indian market at this moment of time will repent in the future.
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India’s bull run will continue from current levels with some geopolitical hiccups, but it will not break unless we have World War 3.
We will be completing the 6-months of 2022 and it has been a volatile journey for investors. What is your outlook for markets for the rest of the year? Will we hit 14K first and then rebound?
Yes, this volatility was well expected due to higher inflation and the ongoing Russia -Ukraine war. We already cautioned our investors in our year-beginning note and suggested them to be in cash for some time.
However, we are now suggesting our clients to deploy at least 60% of the money back to equity markets. To answer your question, whether the market will touch 14K depends on the outcome of the NATO conference where Finland & Sweden may be applying for formal membership of NATO on 30th June 2022.
Any negative surprise from that summit may bring Nifty50 of 14K or below, hence we are deploying only 60% at current levels.
Sectorally, Realty and IT sectors fell by more than 20% so far in 2022 – what is weighing on these sectors, and will the weakness continue? Any top stocks which are worth buying?
If you closely observe most IT sectors stocks have given 60% to 400% ROI since March 2022 Covid-19 lows. Hence, we may say it is a temporary correction in the ongoing bull market of Indian IT sectors.
We are beginning to buy in this sector with a stock-specific approach. The real estate sector has come out of its bear cycle after twelve years.
We are neutral on this sector at its current valuation as we see much more compelling opportunities in Banking & IT sector at this moment of time.
War, inflations, Yields, rate hike, and crude oil remains relevant evil for equity markets for the rest of 2022 – how should investors prepare their portfolio?
Investors should focus on value investing at this moment of time rather than chasing any social media information or stock tips from unauthorised mode.
The market may remain volatile till August 2022. However, investors should choose their sectors & entry price with much more due diligence compared to a year back when every stock was running even without kickers.
At this moment in time, we have a lot of sectors & stocks which offers a great entry point for medium to long-term Investors.
Power sector outperforms so far in 2022 – what led to the price action?
Power sector rally was largely led by retail investors due to too much euphoria around the EV market. In my view, this sector may face time correction vs other growth sectors for the next one year.
Any top 3-5 value picks that investors can look at buying for 2H2022 post recent correction?
Due to compliance, I avoid taking stock names, but in my view banking, IT & pharma sectors are excellent buys at current levels for long-term investors. Investors should buy quality stocks from these sectors at current levels.
If someone plans to invest Rs 10 lakh in H2 2022 – what should be the ideal investment strategy?
He should invest 40% in the banking sector, 30% in the IT sector & 30% in pharma sector in quality stocks. Investors with this weightage may create much higher alpha compared to any other sector weightage.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)