“I am a little bit cautious right now,” said Arvind Sanger, managing partner, Geosphere Capital Management, in an interview with CNBC-TV18.
“I am big bull on the economic cycle that is developing but I think some of the moves are excessive and the market is underestimating some of the inflationary risks,” he added.
“Other than State Bank of India (SBI), I wouldn’t touch any other PSU bank,” he said.
He believes, one should take profits in the Indian market where target prices have been hit. “There are sectors where people have been hiding like IT, where a lot of the good news is already in there. Then there are sectors where the cycle is just beginning, capex cycle is starting, real estate cycle is starting, some of the metals and mining commodity cycles are still in their early days. I like a lot of the old economy stuff,” he shared.
In financials, Sanger is more interested in some of the emerging disruptors than the conventional safe haven stocks.
According to him, coal inventories are at record low levels.
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“There are major factors here at play, which are worth keeping an eye on in terms of headwinds for the global economy. So, there are some real shortages developing on the energy front, which could impact some of the economic bullishness that we are expecting,” Sanger further mentioned.
He believes taper tantrum is off the table. Therefore, there will be no negative shocks, he noted.
For the full interview, watch the accompanying video.