Dharmesh Kant, Head of Equity Research at Cholamandalam Securities, expects any decline in the market is likely to be bought into this week till Prime Minister Narendra Modi's visit to the United States is concluded. "Things are shaping up well but the mojo factor is still missing that can reverse the course of earnings trajectory. It would be a 'buy-on-dip' kind of a market," the market expert told Business Today on Monday.
One sector he's bullish on despite correction is the metal space. "I'm bullish on the metal space seeing the correction in the ferrous and non-ferrous segments. The sector is likely to do well," Kant stated.
For the unversed, the metal pack took a sharp beating today after US President Donald Trump said he would soon introduce 25 per cent tariffs on steel and aluminum imports into the US. This, he said, would be on top of existing metals duties. The US President also said he may announce the reciprocal tariffs on Tuesday or Wednesday.
Sharing views on the defence stocks, the market specialist from Cholamandalam highlighted that the entire sector has corrected quite a bit. He liked BEL (Bharat Electronics Ltd) and HAL (Hindustan Aeronautics Ltd) from the defence basket.
Kant also suggested Reliance Industries Ltd (RIL) and Tata Motors would be decent value picks at current levels. "Automobile space is a space where one should be focusing on but one has to be a bottoms-up picker right now rather than a top-down approach," he added.
He advised a neutral to a negative earnings bias approach for the BFSI (banking, financial services, and insurance) sector. "If you look at the SBI (State Bank of India) numbers, what was alarming was that 15 per cent advances growth. Rs 42 lakh crore is the asset book and from there they are advancing 15 per cent. But the major (trigger) came from the unsecured lending part of the book. HDFC Bank went out with a 3 per cent kind of advances growth and these (SBI) guys are going with a 15 per cent with unsecured exposure getting the maximum of it is a bit of a worry point."
In the BFSI segment, the market expert underscored that investors should be selective with their approach.