The market is heading for more pain in near term, said Sunil Singhania, founder of Abbakkus Asset Management, adding that the first quarter of FY21 is going to be a washout.
“It is a situation which is one in a century kind of a situation. We have never encountered this before and therefore no one can say for sure how this is going to pan out. As far as India is concerned, we have had a longer lockdown. We are just about starting to open up. So it is a given that this Q1FY21 is going to be a washout quarter. The market is obviously believing that we are heading for a little bit more pain in the near term,” he said.
Speaking about financials, Singhania said, “At this point in time, we had a scenario where everyone started with a huge overweight as far as the financials are concerned. For the last two-three years, they were the ones doing very well. As a percentage of our index also that cross 40 percent. Therefore there was a pressure on a lot of the investors to have financials. What we have seen right now is in a lot of cases, valuations come back to normalize levels. So I think we have seen a correction.”
According to him, investors with long-term horizon will make money if they invest in this dip. One should invest in the market now if one has the capital, he said.
“If you are lucky to have disposable income which you want to invest, maybe investing now over the next couple of months might be a good sort of an idea to make eventually at least low double-digit returns from the equity markets,” he said.