Kranthi Bathini, Equity-Director, WealthMills Securities
It was an eventful weekend with the US-based short seller Hindenburg Research alleging Sebi chairperson Madhabi Puri Buch’s involvement in the Adani group matter. KRANTHI BATHINI, director-equity at WealthMills Securities, told Rex Cano in an interview that he still recommends equity as the preferred asset class with significant allocation towards large-cap stocks. Edited excerpts:
What’s your interpretation of the latest Hindenburg report? Can the events derail market sentiment if things got uglier?
What’s your reading of the current market? Preferred sectors?
The Indian stock market has been resilient and resurgent despite the recent geo-political worries. The market has been able to withstand selling pressure backed by strong domestic liquidity flow and upbeat trading sentiment back home. The recent June 2024 quarter corporate results, too, were without any negative surprises, thus creating a positive outlook on earnings. Sectorally, we prefer private sector banks, healthcare and consumer staples. In the medium-term, it is better to avoid shipping and chemical sectors.
What are the possible risks that could turn investors cautious on Indian stocks?
It seems like the equity investment culture has been developing in India like the West. Most of the young investors, the so-called the generation Z, are looking for long-term investment and are confident of a growth in the Indian economy. DIIs, too, are flushed with liquidity. Any global slowdown, a recession in the US or unstable geo-political environment can make these investors turn cautious towards stock investments.
Do you see higher short-term taxes, new trading derivative / F&O norms impacting the market sentiment and volumes?
We do not see much impact on the short-term capital gain tax hike on the market, as equity returns in India are attractive both from a short-term and long-term perspective when compared to other relative asset classes. New F&O trading norms will have some impact on the retail volumes in the derivatives segment, but we need to see at least a couple of quarters to gauge the actual impact.
What would your advice be to investors at such times? Any safe havens where investors can seek refuge?
ALSO READ: How to trade Adani stocks now?
In terms of diversification; which are the other assets that one should consider for investments, say for a 3-5 year period?
We would recommend equity as the preferred asset class with significant allocation towards large-cap stocks; and timely rotation in mid-caps/ sectors as the crux to generate alpha in the stock market. That apart, investments in gold and silver can help an investor thrive through a low interest environment.
First Published: Aug 12 2024 | 11:32 AM IST
