NSE Nifty 50 could hit a brand new report excessive on this new monetary 12 months, surpassing the earlier all-time excessive of 18,604.45, says Sanjiv Bhasin, Director, IIFL Securities. In at this time’s session, Nifty 50 surpassed 18,100 degree, first time after 19 January 2022. In the earlier fiscal, the 50-share index provided 19 per cent returns to the buyers. In the upcoming RBI MPC, the primary assembly of the 2022-23 fiscal, Bhasin forecasts an rate of interest hike of 25 bps. He is bullish on charge delicate sectors such auto, banks, and realty sectors. Apart from Axis Bank and ICICI Bank, Bhasin has additionally advised Godrej Properties, Godrej Consumer Products, DLF shares, amongst others. Here are edited excerpts from Sanjiv Bhasin’s interview with Surbhi Jain of FinancialExpress.com.
1. How do you see the Axis-Citi deal? Will the Citi deal be dangerous or good for Axis? What’s the road verdict?
Excellent deal for Axis because it will increase its rankings within the bank card enterprise to the highest 3 and it additionally inherits the wealth administration enterprise. Alongside, the model of Citi shall be one other constructive which implies the cash is nicely spent as Axis was in search of development alternatives after cleansing their stability sheet during the last 3 years.
2. U.S. Treasury yield curve inverted on Tuesday for the primary time since 2019. What does an inverted curve imply and why is the yield curve inverting now?
Inverted yield curve is when the brief time period 2 12 months yields turn into greater than the ten 12 months yields, indicating rise in value of cash within the brief time period or indications of a looming recession within the economic system. This is prompted this time primarily because the Federal Reserve was behind the curve & not elevating charges as he felt the inflation was transitory & let it rise. However, now the Fed appears to have turned extra ‘hawkish’ than anticipated & will look to boost charges quicker than anticipated to chill inflation & scale back the stability sheet which is operating report debt of over US$ 23 trillion. However, we really feel this can be brief lived because the going away of Covid lastly together with return of the labour pressure coupled with no extra free handouts will see wage inflation fall & additionally the brief time period aberration in gas costs brought on by the geopolitical tensions could subside within the subsequent 2 months.
3. Do you see current corrections in inventory markets as a chance to enter?
Well, there was the most effective alternative of shopping for the worry which got here within the 1st week of March when the first bombs fell. Historically markets backside out when the first bombs fall & we noticed the most effective rally in over 3 years within the final fortnight with indices rallying over 12-18%. We nonetheless assume there could also be extra alternative to purchase any corrections as markets have already priced in greater charges & the brief time period geopolitical threat. Rates are rising as a consequence of development & not stagflation which implies corporates will see robust earnings in coming quarters.
4. Where do you see charge delicate shares — banks, auto, realty — forward of RBI MPC? Do you see RBI Guv climbing rates of interest this time?
Maybe 25 foundation factors, nevertheless Indian inflation outlook nonetheless seems benign & the shock in crude could also be coming to an finish as Russia itself is seeking to supply oil 35% cheaper than world costs. I’m bullish on banks, auto, and realty, as they’ve underperformed and should outperform within the 2nd half of the 12 months as demand exceeds provide. Reality is in a candy spot because the double wealth impact of rising shares & gold make the most effective alternative to personal laborious belongings like land with demand from good builders seeing the most effective in over 5 years.
5. What is your outlook for Indian inventory markets for the brand new monetary 12 months?
Test of 18600 & perhaps new highs earlier than most anticipated as international promoting ends & shopping for from retail continues to see greatest SIP flows ever witnessed.
6. What are the important thing themes, sectors and shares to give attention to within the new monetary 12 months?
Key sectors equivalent to Reality, building, banks, infrastructure & PSU shares will stay in focus. Stocks of Godrej Properties, Godrej Consumer Products, DLF, Axis Bank, ICICI Bank, Sterling and Wilson Renewable Energy, and IRB Infrastructure Developers shall be in focus within the new monetary 12 months.