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Market likely to consolidate, money to move back into broader market, says Kotak MF

market | Oct 24, 2019 11:09 AM IST

Market likely to consolidate, money to move back into broader market, says Kotak MF

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The Indian market has seen more stability since the tax rate cut although it would be difficult to say whether it could reclaim the all-time highs, said Harsha Upadhyaya, CIO-Equity, at Kotak MF. 

The Indian market has seen more stability since the tax rate cut although it would be difficult to say whether it could reclaim the all-time highs, said Harsha Upadhyaya, CIO-Equity, at Kotak MF.

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“While the midcap index may still be underperforming the Nifty or the Sensex, clearly some of the midcaps which have reasonable balance sheet, reasonably steady demand conditions, have all moved up quite a bit in the last one month. So, clearly money is moving into the broader market where there is more valuation comfort,” he pointed out.
“This gives us hope that market will consolidate at the current level and hopefully next year will be better than what we have seen in the past,” said Upadhyaya in an interview with CNBC-TV18.
Although the stress in the NBFC segment continues, the frequency of negative developments and negative news flow would start to diminish. “Since September 2018, we have not seen any money going into any of the NBFCs. However, most of the papers that were there from NBFC segments were of a tenure of up to 18 months. So give or take a couple of months, we should not see too many news flow from this segment,” he added.
However, Infosys whistleblower controversy remains a worry. ”We will have to wait and see how it unfolds and what impact it will have on business, management and other factors,” he said, adding that while they hold the stock in most of their portfolios, they have been underweight or equal weight.
“If you are building your portfolio for the next few years, it is better to focus on non-consumption side where valuations are relatively comfortable and over a period of time given some of the reforms that the government has undertaken, one may see better upside in that pocket,” he said.
For Kotak MF, SIP flows have remained quite steady and most likely will continue to remain so for the entire industry as well. “In terms of overall flows, we continue to see good interest in equities. We just closed our new fund yesterday and we have got a reasonably strong interest from retail investors, he said, adding that the mood is positive in the overall space although September numbers were a bit lower than the previous couple of month.
“So give or take a few hundred crores, we should be in the range of Rs 6000-8000 crore monthly net flows,” he said.
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