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Possible for Indian market to surpass old highs by end of year, says O’Neil Global Advisors

Updated : September 03, 2020 12:14 PM IST

It is possible for the Indian market to surpass the old highs before the end of the year, said Randy Watts, chief investment officer at O'Neil Global Advisors.

Stating that the Indian market is one of the top 10 markets out of 47 that the firm monitors, Watts noted that although the market is still down 6 percent year-to-date (YTD), it is up 31 percent from March 31.

"One of the things we do is we track when the market has a big move on volume and that emphasizes a major new start of a trend... So there is a lot of momentum behind it. We are optimistic on it and we are optimistic that it does have an opportunity to maybe surpass those old highs before the end of the year," said Watts in an interview with CNBC-TV18.

Watts said the Indian economy, over the long term, has got a lot of growth potential and one of the things that the Indian investor should think about is while some of the growth stocks are big, they don’t have the share of market that typical growth stocks might have in a more developed market.

"A good example of this is Avenue Supermarkets. This company has a lot of opportunities over the next 5-10 years to take a lot of market share and over the next four years, we think they can grow at about 25 percent clip. That is one. Next one we like is Biocon. They are one of the leaders in generic biopharmaceutical drugs. They partnered with Mylan in the US. This is a company that has got a very bright future and is in a rapid expanding market," explained Watts.

Watts likes Tata Communications and Infosys.

“We like more of the growth stocks in India than the cyclicals and obviously growth has been more leading in India particularly in the technology sector and I think that those companies actually have a little bit of a faster growth rate potential over the next five years. So we would probably be on the side of growth, not cyclicality or industrials,” he said.
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