Despite the recent hiccups in the domestic equity markets due to the falling rupee, high energy prices and outflows by overseas investors in 2022, Nishit Master, Portfolio Manager, Axis Securities PMS, believes that India remains an island of stability amid the turmoil in the global markets. His views came at a time when the benchmark equity index BSE Sensex is almost flat (down 0.10 per cent) at 58,191.29 on a year-to-date (YTD) basis, while the most widely followed global index Dow Jones Industrial Average cracked nearly 20 per cent during the same period.
Considering the present market scenario, Master foresees Nifty at the 18,580 mark by next Diwali, indicating an upside of just 7 per cent from the current levels of 17,314 on October 7.
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“We believe that in the short-term, emerging markets could be volatile on the back of currency depreciation against the US dollar. Another factor to be concerned about in the short term is the advent of winter in Europe and the US which can lead to a significant increase in energy prices which will keep the markets choppy,” he said.
For sector-specific investors, he advised investors to prefer automobile, consumer discretionary (including hospitality), industrials (including defence) and banking sectors for their portfolio.
“We prefer domestic growth stories in an environment, where the global growth outlook is weak. The auto sector witnessing a strong demand along with domestic consumer discretionary names should outperform. With the global supply chains undergoing significant changes, the capital goods and industrial sectors should also do well. Last but not least, we like the banking sector with its cleaned-up balance sheets and it is expected to pick up in credit demand from new project announcements,” he said.
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While sharing his top picks for this Diwali, Master added that he likes names like ICICI Bank, Bank of Baroda and SBI in the banking sector. In the industrial space, he prefers Bharat Dynamics, Mazagon Dock and Mishra Dhatu Nigam. EIH, Mahindra & Mahindra (M&M), Tata Motors, and Varun Beverages are among his other top times in the consumer or quasi-consumer themes.