Sharp Correction Across Markets Likely Soon, Andrew Holland Says
Global markets, including India, are likely to witness a sharp fall soon despite easing trade tensions between the U.S. and China, according to market veteran Andrew Holland.
The U.S. Federal Reserve could increase rates a bit more than expected and the markets might not be factoring it in, Holland, chief executive officer at Avendus Capital’s Alternate Strategies, told BloombergQuint in an interview. “A re-run of February is likely in the next three or four months.”
Both the Indian stock market benchmarks S&P BSE Sensex and the Nifty 50 fell nearly 5 percent in February. They are trading nearly 6 percent lower than their January peaks.
Fourth Quarter Earnings To Be Good
Earnings for the quarter ended March should be good compared with the previous three months, Holland said. Information technology major Infosys Ltd. will kick off the earnings season by announcing its numbers today.
Here’s Holland’s sector-wise earnings outlook:
- Not expecting big earnings growth.
- Management changes at Infosys positive for the company.
- Rupee depreciation key to stock performance.
- Industry unlikely to return to high growth.
- Select mid caps will continue to do well.
- A lot of investors will continue to focus on select mid caps.
- Mid caps probably have a better upside in the short term.
Auto And Auto Ancillaries
- Invest selectively in four-wheeler and two-wheeler companies.
- Entire sector still looking good.
- Likes a few auto ancillaries that are benefiting from growth in India and abroad.
“We continue to selectively invest in a few auto shares which are doing well,” Holland said. Avendus Capital’s focus is more on two-wheeler companies pushing a few brands that are doing well rather than those which come out with new products and confuse the consumer, he said. “The whole sector is still looking good. For auto parts too, there are a few names we are looking at.”
Watch the whole conversation here: