Tag: Stock Market India

Large-cap stocks offer maximum comfort amidst challenging environment: UTI AMC

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Vetri Subramaniam, the Chief Investment Officer (CIO) of UTI Asset Management Company (AMC), has expressed his assessment of the current macroeconomic landscape, noting that it presents challenges for mid and small-cap segments, while large-cap stocks offer the highest level of comfort.

In an interview with CNBC-TV18, he emphasised, “When we consider the macroeconomic scenario, particularly for the mid and small-cap segments of the market, it does not appear favorable. In contrast, large-cap stocks are where we find ourselves most at ease.”

Subramaniam’s remarks come against the backdrop of elevated global interest rates. He holds the view that the prevailing macroeconomic conditions suggest a prolonged period of higher interest rates in India, a trend that is mirrored globally. He remarked, “Global growth, particularly in the US, is proving to be resilient. However, this should not be interpreted as a rampant expansion. Therefore, we cannot rely on robust global growth to propel our market.”

He consistently maintains his perspective that large-cap stocks offer the most stability, followed by mid-cap stocks, with small-cap stocks being the least reassuring. This viewpoint has remained consistent over the past three months. He did acknowledge being taken aback by the resilience demonstrated by small-cap stocks during this period.

Examining market trends, Subramaniam contends that mid-cap stocks deliver superior returns compared to their large-cap counterparts. He elucidated, “Upon scrutinising data over extended periods and adopting a rolling basis analysis, it becomes evident that mid-cap stocks emerge as the most appealing market segment in terms of both returns and risk-adjusted performance, outshining large-cap stocks. However, the same cannot be asserted for small-cap stocks.”

Subramaniam further pointed out that small-cap stocks present the least comfort when considering valuations. He cautioned against placing excessive emphasis on year-to-date or even three-year data, suggesting that these time frames may be influenced by a particularly favorable baseline for small-cap returns. To gain a more accurate perspective, he advised extending the horizon to five or seven years, a shift that could yield markedly different results.

Also Read: Bank Julius Baer predicts extended high interest rates based on US Fed’s data driven decisions

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Aditya Birla Sun Life AMC says mild correction in markets likely from global hiccups

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Mahesh Patil, the chief investment officer of Aditya Birla Sun Life AMC, on Thursday (August 10) said he sees a certain amount of risk in market sentiment globally and he feels a mild correction is likely to take place from global hiccups.

“On the global front, you could see some kind of hiccups and in that context, you could see some consolidation or possibly mild correction in the markets,” he told CNBC-TV18. His comments come in the backdrop of US banks being downgraded, India and US inflation data now being in focus, and the earnings season almost wrapped up.

He said while the outlook on the market has been positive, the overall earnings season though has been a kind of a mixed bag. However, the overall earnings growth still remains fairly intact.

“We are still seeing, this year, Nifty earnings growth in the mid-teens, which is very good, and overall, India’s outlook in terms of GDP growth also remains very strong. So, we are expecting around 6.5 percent GDP growth this year, which is actually higher than what we were looking at the beginning of the year,” Patil said.

He noted that the rural demand too is witnessing some positive signs, “It has been weak now for almost a year, and the commentary coming in from the auto companies or from the FMCG players, they are seeing some kind of green shoots over there. And also, the overall rainfall has been good. So that should be fine.”

Also Read: Zee Entertainment Share Price: Stock gains after NCLT approves merger with Sony India, analysts divided

Patil said he has been positive about the auto sector for a while now. “We have seen a good rally across commercial vehicles, four-wheelers, and two-wheelers. Having said that, for the overall valuations in the sector, the upside is limited while the uptick could still continue in terms of recovery,” he said.

And on the banking space, he believes it may witness some earnings downgrades, “In the banking sector, we have seen some amount of margin pressure in a few banks.”

The net interest margin of some of the large PSU banks have been slightly disappointing when the expectation was that the fall would be much lower. So, that is where you could see some kind of downgrades to earnings growth in this fiscal year,” he said.

Patil added the pharma sector has also positively surprised in the US generics space, “There were some amounts of supply-side disruptions which were there which probably led to some price increases for a few categories. But the indications that we are getting, talking to the companies, is that there is some amount of consolidation which is happening on the supply side.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Markets are in for a reasonable correction, says Demeter Advisors founder

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Indian markets are in for a meaningful correction, and it could be a time correction as well, as per the estimates of Ashwini Agarwal, Founder & Partner, Demeter Advisors.

“We’ve had a very sustained run from the end of March. It’s almost three and a half months long, which is very long as a minor bull cycle goes, and we haven’t had any meaningful correction. During this period, the narrative has significantly changed in India’s favor in the global context, this has obviously attracted a lot of foreign capital,” he said.

The earnings direction has either kept pace or is falling short of expectations, Agarwal said. “Even if you look at the June quarter results that have been released till now, I fail to find too many spots outside of banks and financials where there have been meaningful positive surprises from the underlying expectations,” he said.

With the global narrative starting to get a little more ‘iffy’ and with valuations stretching, earnings environment not delivering as many positive surprises, Agarwal is of the view that the markets are in for a reasonable correction. “Now, whether it will be a time correction, or whether it will be a deeper correction, we will find out and it’ll be driven by an event that we can’t forecast. But I think the fuel for a rally to 21,000 or something along those lines is not there, at least in my mind,” he said.

In over the past month, the Nifty 50 has scaled to all-time highs from its March 20 low of 16,828. On June 28, it crossed the 19,000 mark for the first time, it touched its all-time high of 19,991.85 last month, and since then has been attempting to reach the 20,000 milestone.

Agarwal also believes that the market’s single largest exposure is pharma in terms of a sectoral exposure. He has been positive on pharma for around one-and-a-half years now, while it has been painful as well for the sector in that period. “But it’s very heartening to see the kind of earnings flow, fundamental information that’s coming through about pricing environment in the US, and so on and so forth, in the midst of valuations, which have been actually quite attractive across the board. So I continue to feel fairly positive about pharma, and the earnings flow in pharma as a sector has also been on the positive side, compared to what the expectations were,” he said.

He is of the view that pharma is in a position where the earnings are in line with estimates, even slightly ahead. “But i think the market sentiment was to beaten down and it’s the correction in the market sentiment, which is leading to these very sharp rallies in some instances,” he added.

Also Read: PB Fintech Share Price: Macquarie issues lowest target on the street, cites risks from Bima Sugam

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow