The markets have been volatile in India and the world alike so far and it will probably continue to be a tough year to make money in even as we move into the second half.
That's the view from Vikas Khemani, founder at Carnelian Asset Management; and Mihir Vora, chief investment officer at Max Life Insurance. Both expect volatility to persist.
"2022 is an year that will make us sweat and work hard for money and there will gut-wrenching volatility across asset classes because we've had multiple unprecedented factors," Vora told BQ Prime's Niraj Shah in a Twitter Spaces chat.
In fact, he said, the last 12 years have been unprecedented, starting right from the quantitative easing in 2008 to the pandemic and now the war. "We are seeing asset prices across commodities, equities, bonds and real estate coming off from all-time highs now."
It's difficult to predict how governments will behave amid recession and inflation fears, he said. "Even though there are pockets of growth, we will see volatility going forward."
The upside will be if central banks back off from tightening too much amid fears of a recession fears in the U.S. or in the global economy, according to Vora. "It's like the Schrodinger's cat. It's very difficult to predict bottoms."
For Khemani, Russia's war in Ukraine and China lockdowns upended normalcy after the pandemic and led to a spike in inflation.
"The choice central bankers have isn't between good and bad, it's between one bad and another," he said. "The narrative has now shifted from inflation to whether it is low-growth or recession."
According to Khemani, inflation has peaked out, commodity and food prices have come down. "Depends on when the Ukraine war will end, that will impact food and energy prices. Large part of the froth has been cleared across asset classes. As far as India is concerned, one shouldn't be overly worried."
Khemani said 14,500-15,000 levels for Nifty are "very attractive", but also added that the "number is always a contextual and we will have to keep seeing in light of the other circumstantial fact and evidence."
Vora sees pockets of opportunities in I.T. and banking. "Banking is not very bad valuation-wise," he said. "Some sectors are not stretched and there are certain sector and stock-specific valuations that are still attractive. It's a good time to start stock-picking."
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