A woman arranges Indian rupee coins on a street in Kolkata, West Bengal, India. (Photographer: Sanjit Das/Bloomberg)

It’s A Buy: Why Depressed Broader Markets Are Good For Investors

Broader markets, including Nifty, are trading lower in terms of both price points and valuations, and thus provide a good opportunity to buy stocks, Sundaram Mutual Fund’s Chief Investment Officer for equities S Krishnakumar said.

“Narrow rallies [tend to] give way to broad market movements,” Krishnakumar told BloombergQuint, adding that he has been seeing re-balancing in the market from the past 15 days, wherein the high price-to-earnings stocks are losing value to bottoms up ideas with tremendous value.

Krishnakumar expects the rally in the midcaps and small caps to be broader, covering various sectors around the cyclical space such as infrastructure and construction, logistics and capital goods to perform well. “Steel and alloy steel [would have] tremendous opportunities of growth in the next five years.”

Global Playout

Krishnakumar expects the overall global scenario to be favourably positioned for the emerging markets from the medium term perspective. While the growth in developed economies would slow down, the emerging markets’ central banks would ease and create space for growth in the financial year 2019-20, he noted.

He, however, said that the uncertainty surrounding the Brexit and the possible U.S.-China trade deal fallout may create short-term quandary in the market.

Watch the full interview here: