Sectors dependent on commodity and crude oil prices are likely to bounce back from coronavirus-fuelled lows as there is room for retail fuel prices to fall further, according to Tata Mutual Fund's Rahul Singh.
Sectors like auto, cement, paints and gas utilities are dependent on crude or crude-related derivatives as raw materials, Singh, chief investment officer of equities at the mutual fund, said.
That comes when Indian stocks have tumbled in one of their worst routs in more than a decade amid fears that emergency fiscal and monetary packages won't be enough to stave off a slowdown as the coronavirus outbreak stalls trade.
But Singh sees benefits of the slowdown to come in barring few months of uncertainty. “We could expect that there will be a time when markets will start differentiating between sectors which are likely to benefit and where valuations are attractive.”
Also Read: Moody's Lowers India GDP Growth Forecast On Coronavirus Concerns
Key Takeaways From The Interview
- Align portfolio where there is benefit and valuations are attractive.
- Discretionary side of consumption looks dicey.
- Keep an eye on how the consumption pans out.
- Difficult to say if earnings or stock prices are pricing the impact or not.
- Larger banks will emerge stronger at the cost of smaller ones.
- Don't see a dent in the business of financial sector.
- Temporary blip due to the consumption slowdown might be seen.
- Have to be cognizant of the changes that have taken place in the markets globally.
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