BSE Sensex and NSE Nifty 50 have pretty much doubled from respective March lows. Earlier this week, headline indices rose to all-time highs, taking the industry capitalisation of the BSE-listed businesses to Rs 199 lakh crore. Even as indices trade close to record highs, Kunal Sanghavi, CFO, HDFC Securities, told TheSpuzz Online that 2021 may perhaps not be a repeat of the 2020 rally. According to him, 2021 will be a lot more distinctive than 2020, as there will be no related sort of rise from lows or the V-shaped recovery in 2021. Moreover, even quick-term volatility can not be ruled out in this calendar year. However, there are a couple of sectors that may perhaps give superior returns from a extended-term investment horizon, Kunal Sanghavi stated.
Winning sectors
One may perhaps see a lot of sideways movement and witness distinctive types of sectors moving but the identification of the proper sectors will be extremely essential at this point of time, he stated. In this new year, markets may perhaps see particular major sectors such as technologies, exactly where India could turn into a surplus exporter to the rest of the globe. Among other sectors, Sanghavi expects pharmaceuticals, infrastructure, logistics and e-commerce to outperform. “It is not about whether the markets will be good or bad. It’s more about whether one is in the right sectors or not,” he stated.
The investment in proper sectors will surely appreciate from the existing levels as the year 2020 formed a superior base. As quick-term corrections in the middle are extremely a lot on the cards, 1 wants to have cautious strategy from a quick-term viewpoint.
2020 vs 2008: What changed, what didn’t
Last year 2020 was a replica of what occurred in 2008, Sanghavi stated, drawing parallels among the two important drawdown periods. Both occasions, markets witnessed massive corrections and panic was at its peak. During such occasions, institutions globally invested their surplus money. “While looking at certain liquidity parameters, during 2008-09, we saw liquidity was at its highest in 2009 and then it got stabilised. Now, 2018-2020 has been a period of slack and now we are seeing a rebound from an overall perspective,” he stated.
Sanghavi advised that 1 will have to element in the improve in the general GDP, as India moves toward the Prime Minister’s dream of attaining a $5 trillion dollar economy. India has currently crossed the $2.7 dollar economy, so far. “The vision which we are trying to achieve is leading to a lot of surplus money in the ecosystem,” he added.
From a extended-term viewpoint, Sanghavi believes that this is the proper time for the investors to enter the stock markets as international liquidity has been at its highest. After rallying to the all-time highs, equity benchmarks succumbed to profit-booking. From the record higher hit yesterday, BSE Sensex has tumbled 1,045 points or 2 per cent on Friday, even though the broader Nifty index plunged to 14,453, falling more than 300 points.