Future Generali India Insurance Company on Wednesday said there could be some volatility in the market till elections as it is a big overhang, however, after that the rally would resume.
General elections are a big overhang but with the chances of incumbent government coming back to power brings confidence to the market, said Jyoti Vaswani, chief investment officer (CIO), Future Generali India Life Insurance.
"Moreover, the currency is stable and foreign institutional investors (FII) flows are coming back, so one could say that the current rally has more legs to go," Vaswani said.
According to her, the current rally is more broad-based than what the market has seen in the last 12-18 months with some participation seen from the midcaps. "However, the divergence between the Nifty and midcaps still continues," she added.
Sector-specific, Vaswani said the auto sector faced many challenges in the December quarter but could see improvement in the numbers around second half the year.
“Valuations of the auto companies look attractive and can be accumulated. They have discounted the slowdown of next couple of months,” she said.