Bear attack wipes out Rs 50 lakh crore from investors’ wealth; Amar Ambani of YES Securities suggests buying these stocks

Equity investors lost Rs 50 lakh crore in 35 trading sessions amid the ongoing selling on Dalal Street. The combined market capitalisation of BSE-listed firms tanked to Rs 428.67 lakh crore in the morning trade on November 18, 2024, from Rs 478.93 lakh crore on September 27, when the benchmark equity index BSE Sensex scaled its all-time high of 85978.25. The 30-share index traded at 77,239 on Monday.

Meanwhile, foreign institutional investors (FIIs) sold shares of more than Rs 1.15 lakh crore during the same period, the rupee hit a new low, and Donald Trump won the US presidential elections. 

What do all these developments mean for Indian equity markets and is it the right time to buy large caps? In an exclusive interaction with Business Today, Amar Ambani, Executive Director, YES Securities said the last three years were a different ball game, a relatively easy ride for investors, as almost every scrip across sectors was part of the rally. It was only a question of what went up and by how much.

“At this juncture, we are more likely to see a marked divergence: of drawdowns in certain themes and stocks, and buoyant performance in select propositions. We can say with conviction that companies with growth visibility and professional management will do well, provided their valuations are not sky-high,” he said.

For stock-specific investors, he shared that real estate is a compelling multi-year story. Demand is strong across affordable and luxury segments, and realty sales are outstripping new launches, thereby shrinking inventory. “Prices have moved up, but they’re still reasonable when adjusted for inflation. The customer is a lot more comfortable with sector regulation in place, and reputed developers command a premium on their products. Esteemed players like Sobha should continue to do well,” he said.

He further added that leading brokers, wealth management companies, and insurance players stand to make the most of the massive shift of Indian investors towards financial assets. The market watcher is bullish on Angel One, Anand Rathi Wealth, and Max Financials. Ambani also likes Shriram Finance and Can Fin Homes.

Sharing his views on the victory of Donald Trump, he said, “We can surely expect tax cuts and fiscal spending, which implies boom time for US equities. If Trump manages to de-escalate the Russia-Ukraine war and also achieve a truce in the Middle East, the geopolitical risk will be significantly lessened. Trump’s policy on pumping more oil will also help keep crude prices in check. If Trump succeeds, it will augur well for the Indian equities.”

Commenting on the falling rupee, Ambani said that a falling rupee keeps the FIIs away. Fall in emerging markets currencies also disrupts global trade and increases the risk of slowing down world GDP. “It may help our merchandise and software service exports, but it will be net-negative on trade balance and inflationary in essence, which will trigger a pause on rate action. Once the rupee stabilises after the fall, India will attract money flows again. Knowing that Trump is a businessman ahead of a politician, we sense he will rather opt for a trade deal spree with countries like India than disrupt global trade,” he said.

He believes that once the froth is cleared and the benchmark equity index NSE Nifty settles say at 22,200-23,000, value buying from domestic investors will begin. “Once there is clarity on the direction of Mr Trump’s policies, FII money will pour in too. One key factor that could add to positive sentiments is again Trump-related; if he can broker a truce in the Middle East and between Russia-Ukraine, that will add to the risk-on sentiment. The Q2 FY25 India Inc earnings were no great shakes and a revival in Q3 in conjunction with a revival in urban demand will be another key factor to watch out for,” Ambani said.