Nifty In Correction Phase, May Decline 3-5% In Next Few Weeks, Says JM Financial’s Gautam Shah

The post-budget market setup is skewed to the weaker side and could lead to a further downside, according to Gautam Shah, associate director and technical analyst at JM Financial Ltd.

The Nifty index is in a correction phase as many large-cap stocks stuttered in the past few weeks, led by the slowdown in “popular sectors” like financials, information technology and fast-moving consumer goods, Shah told BloombergQuint in an interview.

He expects the Nifty to decline by 3-5 percent in the next few weeks. “All the stocks which have exhibited relative strength in the last four to six weeks...are the best candidates to look into in the next three to six months."

Pockets Of Interest

• Expects IT, FMCG and banks to see sharp correction.
• On relative basis, capital goods may do better.
• Recommends buying capital goods stocks from a medium-term perspective.
• Public-sector undertakings are starting a mega uptrend.
• This Nifty correction is a good time to buy PSU stocks.
• Mid-caps and small-caps relative to Nifty look attractive.
• Excellent opportunity to buy small and mid-cap stocks for long-term investments.
• Shorting perspective in top 10 to 15 large-cap names.

Watch the full interview here: