'Investors Should Stick to Quality Large, Mid-caps': Ventura Securities
Edited excerpts:
We believe that the run from 16,000 to 16,500 was very fast and hence we believe that the market will take time to consolidate before deciding its next trajectory. On the strategy side, we recommend investors to stick only with quality large and mid-caps and avoid small caps given that the market is trading at an all-time high and any move on the downside can be much faster.
RIL, Infosys, HDFC, HUL, Wipro, TCS, Bajaj Finance soar new levels in market capitalisations last week. Will the blue chips take the charge from here?
We believe that given current market levels, investors should only stick with blue chips and should not chase returns. Blue chips can always be bought irrespective of market levels, however, we recommend buying it in a staggered manner now due to all-time high market levels currently.
Your take on broader markets?
As already spoken above, we recommend staying away from small caps for the short term and buy only quality mid-cap stocks. Over the longer term, we believe that good companies whether large/mid or small have always got the ability to bounce back and cross their previous highs as fundamentals keep on improving.
Indian markets have so far outperformed the emerging markets in August but with news of sooner-than-expected tapering by Fed and several others expecting a 8-9 per cent correction in the markets, do you see the long bull-run getting over any soon?
Nobody knows when the market will fall. History has shown us that whenever the market has fallen in a big way, it is always due to the unknown. This time whether the unknown would be preponement in tapering or 3rd wave or any other reason is anybody’s guess. What we would recommend is to stay light and buy only when the earnings catch up with valuations.
Views on the private banking sector
We believe that in the longer run, the private banking space is set for major disruption due to fintech startups and somewhere the market has already started taking note of the same. Valuations from hereon would depend on how private banks adapt to new age technology/banking. We recommend HDFC Bank, ICICI Bank as we feel these are safe names in these challenging times.
