Markets To Stay Volatile For Next 45 Days, Says Ajay Srivastava

Markets will continue to see volatility for the next 45 days, says Ajay Srivastava, managing director of Dimensions, adding there are no major economic events post the Budget and Monetary Policy Committee meet to prompt buying.

Speaking to NDTV Profit, he also cautioned that in the next one year, every time the markets rise close to 10%, there will be "more profit booking and that will be the challenge for the market".

While acknowledging the market might currently be in oversold territory, he emphasised that the earnings of several companies had not met expectations. Therefore, the upcoming quarterly results would be crucial in determining market direction.

Additionally, with the financial year-end approaching, there would be significant rebalancing of portfolios, especially with investors looking to offset taxes. This would contribute to volatility, particularly in mid and small-cap stocks, where retail investors have been actively selling, while foreign institutional investors have not been involved in significant selling.

Srivastava also expressed concerns about the Reserve Bank of India's move to cut interest rates. He pointed out that India’s interest rates are now closely aligned with the US Federal Reserve's rates, and that India is paying a price for standing in contrast to global monetary policies.

This move also further pulled investors away, according to Srivastava. He said that as long as FIIs remain on the sidelines, the market will not see a major revival, as retail investors and mutual funds have done their bit.

Despite these challenges, he remains optimistic about certain sectors, particularly pharma, telecom, and aviation, which he sees as safe bets amid market uncertainty.

On the other hand, Sandeep Tandon, MD and CEO of Quant Capital, shared a cautious outlook, particularly for midcap stocks, which he believes are still overpriced. He has recommended selectively buying large-cap stocks, as many are currently in neglected zones.

Tandon anticipates that by mid-April, the current market cycle will peak, and with it, there will be better opportunities to buy. He sees currency markets offering crucial signals for equity market movement and expects FIIs to return only once currency stabilisation occurs.