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market | IST

India's Q4 underperformance likely due to portfolio repositioning; betting on banks, autos: CLSA

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Laurence Balanco of CLSA, on Tuesday, said that the next target for Nifty is 18,800. Balanco also said that Nifty Bank and autos stand out, given their underperformance since February.

Laurence Balanco of CLSA, on Tuesday, said that the next target for Nifty is 18,800. Balanco also said that the Nifty Bank and autos stand out, given their underperformance since February.
“We had two targets that we were looking for Nifty- 17,800, which obviously we have surpassed and our next target is 18,800, but momentum is starting to slow and we are starting to see rotation. The leadership that you had in the technology sector has started to fade and you have started to see rotation now in sectors like the banks and autos in particular. It’s time to start to rotate out of the performing sectors, particularly tech and start looking at some of the laggards in banks and autos,” Balanco said, in an interview to CNBC-TV18.
According to him, there is a risk that India underperforms in the fourth quarter. “India has been a strong performer within the Asian region, there is a risk that India underperforms through the fourth quarter as you see portfolio reposition, as people take profits from the winners and start to reallocate to some of the underperforming markets,” said Balanco.
“We track all the sub-sectors quite closely and the tech sector is probably the most vulnerable sector within the Indian space, and you definitely want to be taking profits from that space and reallocating to laggard sectors. The banks, particularly compelling here, underperforming since February, are starting to comeback in that space. The Nifty Bank index looks interesting and, in this week, we have seen some momentum come back to the auto space, which again underperformed since February so those two sectors in particular, stand out,” he said.
For the entire interview, watch the video