Both the benchmark indices, the Nifty and the Sensex declined significantly in trade. This is the second straight session of decline for the market. Timesnownews.com spoke to market expert, Ambareesh Baliga on the road ahead for the markets and more.
The Sensex declined 508 points and ended the trading day at 74,267 while the Nifty fell 165 points and ended the trading day at 23,382. Timesnownews.com spoke to independent market analyst, Ambareesh Baliga on the road ahead for the markets. Here’s an excerpt of the conversation:
Q. Is this market volatility entering a deeper correction given the geopolitical uncertainty?
A. Thanks Sakshi for having me, when we’re talking of the markets getting deeper in red, I don’t think it will fall too much more from here. The markets were weaker because of the delay in signing of the US-Iran accord.
We still don’t know whether it will happen in the next two weeks or whether it will take a couple of months more. I think the other issue, which was more India specific, was a reconfirmation that the monsoon this year will be much weaker than what we have seen in the last 11 years. I think that’s what put pressure on the markets on Friday and that is continuing even today. The other issue which happened on Friday was the MSCI recast because of which there was a lot of action in the last 30 minutes of trade that day which led to huge volatility because of which the markets fell. If you’re talking of the next week or two weeks, I really don’t see too much of adverse news coming as such in case, if possible, we may get positive news in terms of the US-Iran accord, because the way I see it is possibly closer to US President Trump’s Birthday, I think, which is on June 14th. I think the accord should be in place.
Q. Which sector should investors watch out for then?
A. I think investors should look at auto where the numbers were quite decent. The latest numbers which came were quite decent despite geopolitical issues, despite the energy shock which we had. I think the auto space and especially EVs among the auto space, I think that should continue doing extremely well over the foreseeable future. The other space where we are seeing some action is pharma, specialty chemicals, I think, if you look at the latest earnings, I think we should start seeing better earnings going ahead as far as specialty chemicals is concerned. FMCG, I think, could be a bit affected because, again, because of the sort of monsoon we are talking about. In case the monsoon is better than what has been predicted, I think that could be the other trigger going ahead, that’s something I think we need to wait and watch because it’ll depend more on the spread.
We are talking about the monsoon hitting on 5th/6th of June but some parts of Kerala have already received rainfall.
Q. For those wondering, is this an opportunity to buy or should we just wait for more clarity that is likely to emerge, what would you say?
A. I mean, after this sort of a fall, which we’ve seen in the past few days, if you’re sitting on cash, would say you should invest because there are a couple of triggers which I talked about a bit earlier, they should happen over the next couple of weeks, so if you don’t invest in this sort of a fall, you’ll never invest, you’ll keep waiting for lower levels. At least invest partially at this point of time and maybe wait a while longer for clarity and then invest the balance.
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