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Use Current Volatility to Accumulate Large-Caps: Sanjiv Bhasin

He sees Indian markets remaining volatile till the "global things settle down" but said that investors should use the volatility to their opportunity.
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Mr Bhasin said that foreign institutional investors would find valuation of Indian markets at 7,500 levels very comforting
Mr Bhasin said that foreign institutional investors would find valuation of Indian markets at 7,500 levels very comforting
Investors who have been waiting for a correction to buy stocks should use the current volatility to accumulate large-cap stocks, says Sanjiv Bhasin, executive vice president for markets & corporate affairs at India Infoline. (Watch Video)

"It is the perfect time for buying India (Indian equities). Because if ever there has been a case for India outperforming China, it is now," he said.

"You could not have better macros," Mr Bhasin said, referring to the Indian economy. The plunge in oil prices will further benefit the Indian economy, he added.

The World Bank recently cut its global economic growth forecast for 2016, citing concerns over the performance of emerging market economies like China and Brazil. But the World Bank expects Indian economy to expand at 7.8 per cent in 2016 versus 7.3 percent in 2015.

According to Mr Bhasin, the recent plunge in Chinese markets and concerns about its economy will benefit Indian markets in terms of foreign investor inflows. "Most FIIs who were overweight on China have suddenly realised after the 20 per cent fall that there is fear which is lurking," he said.

Mr Bhasin said that foreign institutional investors would find valuation of Indian markets at 7,500 levels (Nifty) very comforting.

But Mr Bhasin does not rule out the possibility of Indian markets falling to 7200 on global factors but in the near term he does not see much downside from 7500 levels. "At the speed Indian markets have corrected recently, there is very little room on the downside."

He sees Indian markets remaining volatile till the "global things settle down". But investors should use the volatility to their opportunity and put their money in stocks, he added.

STOCK PICKS

Mr Bhasin prefers large-caps as compared to mid-caps, which have outperformed over the past one year. "Large-cap discount to mid-cap is at almost 8-year low. Mid-caps have moved up on inflows from retail and mutual funds."

In addition, large-caps have valuation comfort and more potential of earnings upgradation, he said.

In the banking space, Mr Bhasin said, investors can use declines to get into ICICI Bank and Yes Bank. In the auto space, he likes Ashok Leyland and Tata Motors. Select cement stocks are also among his picks.

In the capital goods space, he is betting on L&T, At Rs 1,200 levels, a lot of concerns are priced in, he added.

He also prefers HUL, United Spirits and Bajaj Corp among the consumer goods space.

 

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