With this new series, a lot of volatility already kicking in. There are big events lined up, Trump announcements as well as RBI monetary policy. But overall, how is the trend shaping up for you when it comes to benchmark indices?
Rohit Srivastava: So, if you are just looking at the Indian indices and try to discount it without letting too much of the news flow affect you, then the trend is pretty much positive.
Both the daily and weekly RMI momentum indicator that we use are giving bullish signals. So, there is no doubt right now that the markets are going to weaken further.
In fact, we have sort of retraced around 50% of the gains that we had seen in the previous week where it had almost rallied a thousand points and that is a pretty good retracement, which puts us at a very good place in terms of risk-reward to the upside.
So, right around the event, we have already seen markets correct, discount, what may be really happening and, once, the news flow is behind us, you should probably see a lot more improvement in the market is how it is really shaping up right now.
There could be improvement in the market post the announcement. So, probably the worst is being priced in, as you mentioned. But let me come to you and ask you about the reversal that we are seeing in the realty sector today. In fact, after the blowout yesterday, we are seeing very good recovery coming in on Nifty realty. From here on, where do you see a Nifty realty headed? It is doing pretty well for itself. In fact, some of the counters they are trading upwards of more than three-and-a-half odd percent.
Rohit Srivastava: So, realty could pick up with the market itself, but on a slightly more medium to longer term it is going to take some time. What I mean by that is that when we go to a higher time frame and I look at the monthly set up for the realty index, it still looks like it needs to consolidate a lot more before we can really enter the next stage of growth for the sector itself. So, I will probably give it three to six months where it can move up and down within a much larger trading range, but slightly longer term the big moves only are going to happen in the later half of the year. But right now, in the very short term, the enthusiasm may be more because of the upcoming MPC meeting where expectations have become pretty high that interest rates are going to be cut.
And last time I remember that you gave a bold call on the metal index. But for now, apart from metal index, tell us any other sector that is looking good to you right now where you will believe that for the April series, the longs can do good?
Rohit Srivastava: Back to financials because that has been one of the leading sectors. It did not fall much on the way down.
And on the way up now, we are seeing leadership specifically in NBFCs. And, of course, private banks followed by that. So, those segments will continue to attract a lot of investment.
They also undervalued segments of the market, so what is happening not just at a global scale, but also on the domestic scale, is that globally a lot of money shifting from the more valued US equities into places like Europe and China which have much better valuations and the same thing happening at a domestic level between sectors that become stretched on valuations in the last six months to places like financials which are low hanging metals which we already discussed and maybe PSU stocks, those are also not extremely valued. They have corrected a lot, in fact, over the last four to five months and that is where money would actually flow into.
But within financials any particular pocket that is looking interesting to you because in the last leg of rally that we have seen in the second half of March, it was the NBFCs that were leading it from the front. A couple of these private banking names were also trying to lend support. But at this point in time, any particular basket within the public in the PSUs, banking in the NBFCs that is looking good?
Rohit Srivastava: So, I will go back to NBFCs because they have actually seen a good correction. Last few days we have seen them pull back from the gains that they had made, which therefore puts them at a very good price point to start the next move higher.
So, on this dip, I would actually want to go in pick up on the NBFCs again because they will probably be the best performers going forward, especially as RBI has also taken steps to lower risk weightages for the sector, that is pretty much gives it a fillip and then you add to that lower rates, it overall builds a pretty good cycle for the segment.
