Are you surprised that while the West Asia conflict is only escalating, markets are continuing to be so complacent?
Neeraj Dewan: Yes, yesterday’s move was quite surprising for a lot of people because of the way the market reacted and the way midcaps also did well yesterday. But yesterday, there was expectation that the conflict may end sooner than what people had been expecting over the weekend, so you got some indication there. And crude also did not go up that much like it had reacted on Friday. That is why the market took that opportunity and there were some buying on the dip.
But today it has become a little different. Again, we are getting a feeling that maybe yesterday was just an eyewash and today things seem to be deteriorating. So, it is still an evolving situation. We are still not out of the woods there, and there is a possibility that the clashes increase before they subside and before some truce is reached. So one needs to watch out for that.
But back home, the Indian markets are showing resilience and a lot of sector churning is at play. Select oil and gas counters are making a comeback with the theme that is shaping up globally. But along with that, it is also one of those strong sectors which is now showing resilience. In this sectoral churn, which sectors are your preferred bets?
Neeraj Dewan: I still focus on domestic consumption theory, domestic economic revival, domestic development stocks with infrastructure, capital goods, and even banking, NBFCs and housing finance companies. As inflation has been quite low and interest rates are down and they have reached a level where you can get some pick up in consumption based on that, the consumption stock should also do well. Even the staple stocks in the FMCG space should do well because of low inflation and good forecast for the monsoon ahead.
So, all these things augur well for domestic consumption, domestic economy related stocks and that’s where I stay focused. IT may have made a base now, so it may not make sense to sell, but I will still need some more indication of what is happening globally as far as the US is concerned to get a view where a long-term sustained up move can happen in IT. So there I remain neutral right now.
Live Events
Anything that you are liking within the chemical basket although most of these stocks have already run up a fair bit?
Neeraj Dewan: Yes, the chemical basket should still remain strong. Stocks have run up and it will be difficult to pick up now after the runup, but if one is holding, they should keep on holding to the stock. Even something like SRF or other stocks, even in the fluorine gas stocks, demand picks up around this time. So these stocks should be there in your portfolio if you are holding on to them. But after the run-up in the last two-three months, it will be a little difficult to pick up specific stocks at these prices.
