The fundamentals are improving, inflation is coming down and liquidity is flowing, said S Krishna Kumar, CIO-Equity, Sundaram Mutual Fund on Thursday.
Speaking to CNBC-TV18, he said, “The fundamentals are improving, we are in a very sweet sport in terms of the recovery. The inflation is coming down, the liquidity is abundant, the RBI is quite easy on rates, the government is very supportive. Government has changed its course in given away incentives to the corporate and get the economy back on track.”
The government is focussing on getting the economy on track by providing incentives, he said.
“Also the housing sector which has been in the doldrums again is showing up very nicely with the support of the government initiatives both local and central. So we are in a very sweet spot on fundamentals. Globally, also the environment is very supportive in terms of recovery so with vaccine also kind of coming through the next 6 months could further board well for the sentiment and for the growth.”
On investing, Kumar said, “From here on we should be focused on companies which will be able to outstrip others in terms of growth, build on market share gains, and consolidated the positions.”
Metals, energy, and hotels may gain in the next six months, Kumar said.
“Spaces like metals, energy, and hotels have been laggards. We do feel that in the next six months these could lead the rally. On the consumption side, automotive is the space where we have being seeing some slow recovery in market action, we do see that valuations are still quite reasonable in the automotive space and that could be a space which could be a positive bias contributor in portfolios.”
On entertainment, multiplexes, he said, “Again entertainment, multiplexes are areas where there is still lot of a worry and these could be the trades when the economy opens up fully.”
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