On the back of tailwinds getting stronger for the economy as well as corporate earnings, market may surge over a 12-month period, says Amit Khurana, Co- Head Equites & Head of Research at Dolat Capital Market. However, he feels the market needs to consolidate and could witness a correction in near-term.
Khurana remains more sub-sector driven than market driven. He is upbeat on auto space and feels they will outperform in 12 months.
With order books building up, infrastructure stocks will also do well, he says in an interview to CNBC-TV18.
Below is the verbatim transcript of the interview:
Q: It's been a strong run for the market over the last few days. What is your sense? Do you think this run can continue in the month of December or would you be tempted to book some profits now?
A: Tactically, it is difficult to take a call on the market but our structural view have not changed that as the tailwinds get stronger for the corporate earnings and economy in general, we believe that the market will trade higher over 12 month period. But from a near term perspective, we do believe that over the last four-six weeks market have had a sharp run, so its time to have some consolidation, some digestion of news flow as we see over the next few months and therefore we would probably be cautious from these levels in terms of building up very aggressive positions – that's the stance we have taken for the last couple of weeks and we will stick to that in the month of December.
As we get into the new year, hopefully, India allocations will start playing some sort of a positive role and that might lead to some more perk up and as we head into the Budget season thereafter the sentiment will stay positive but from a very near term perspective we believe this market need to consolidate and could even correct a bit from here onwards.
Q: What is your sense in terms of the broader market rally that we have seen particularly today?
A: We are seeing stock rotation happening. If you look at the broader market, we are seeing some action on the midcap side and that is stock specific. So that's more like a day to day movement but in general we have seen a fair amount of appetite on midcap names especially on the discretionary side, consumer discretionary we have seen good appetite, we are seeing positive earnings upgrade potentially coming into some of the estimates there. So those have attracted some attention. We have also seen some action happening on the PSU banks in particular, so those are some of the action names that we are seeing but other than that, we still think that this market will go into a very narrow trading market in general.
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