Sectors like pharma, technology, specialty chemicals and agriculture are the new leaders in the Indian stock market, said Hiren Ved, director and CIO of Alchemy Capital Management, adding that private financials, that led the earlier rally, were lagging behind in the current cycle.
“Every time you see the correction in the market, which is in excess of 20-25 percent, there is some regime change that happens -- the leadership change. Very clearly the market is telling us that the leaders of the previous bull market, which were the private financials, are lagging in this cycle and there are a couple of contenders for this new leadership," said Ved in an interview with CNBC-TV18.
Ved added that some of the stocks from the sectors that are leading now -- pharma, technology, specialty chemicals, and agriculture -- are trading at pre-COVID levels, indicating that the leadership had shifted from financials to these sectors.
According to Ved, the markets are in reasonably fine fettle and that they appear to be willing to overlook the challenges of FY21 and look beyond the difficult times.
“...Typically the bull market starts when the recession starts. I think it will be probably fair to say that we have seen the worst but we must also acknowledge that markets globally and in India have rallied," he said.
Ved, however, also added that the market could take a pause now. "Nobody expected this kind of a rally past the lows that we had seen and it would be fair if the market would take a pause, consolidate here before it decides what it needs to do."
According to him, a combination of global stimulus efforts, liquidity, and economies opening up is the reason behind the recent rally. "Having said that, after a very good run in June for economic indicators, July is a little bit challenging and we need to be cognizant of the fact that there are these selective lockdowns," he added.