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Taking Stock: Market seeing healthy consolidation; earnings to give further direction, says Kotak MF

Updated : July 09, 2021 18:26:16 IST

The Sensex and Nifty slipped for the second straight week but banks and midcaps outperformed. To take stock of the week gone by for the market and how to prepare for the next trading week. CNBC-TV18 spoke with Harsha Upadhyaya, CIO - Equity, Kotak Mutual Fund and Jai Bala of Cashthechaos.Com.

On market, Upadhyaya is of the view that it seems to be in a consolidation where the index hasn’t really moved but the underlying sentiment are strong. “It is a healthy consolidation that we are seeing in the market and as we go into the earnings season those clues will determine the direction and the extent to which the market will move. Also one cannot forget how the COVID trajectory is going to move from here on globally as well as local, so that also needs to be watched,” he said.

When asked if shortage of chips going to be a concern for automotive companies, he said they continue to be cautious on auto not just because of chip short supply but also because of how they view the consumer discretionary demand to move in India.

“As far as chip shortage is concerned, in next one-two quarters it should normalise, so there is an immediate concern but if you are taking a medium to long-term call that should get addressed.”

“However, as far as consumer discretionary demand in India is concerned, we do not have a template that we can use as far as how that is going to revive now. One cannot see the kind of pickup we had seen post-Covid first wave to happen after the second wave because it was more devastating. So the consumer discretionary demand may not come back as fast as what one would have anticipated looking at post first wave,” Upadhyaya added.

Jai Bala of Cashthechaos.Com shared his views on the technicals of the market.

For the entire discussion, watch the accompanying video
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