Market Correction Necessary In Short Term, Says Dalal & Broacha's Milind Karmarkar
The uptick in the per capita GDP will happen anytime between the next five to 10 years, he says.
The broader markets will experience a sharp correction in the short-term period, according to Milind Karmarkar of Dalal and Broacha Stock Broking Pvt.
A correction in the market is necessary in the short term as the markets have moved up significantly over the last few months, Karmarkar, director and fund manager at Dalal and Broacha, told BQ Prime's Niraj Shah.
The key trigger for the markets will be the domestic political situation, he said. "Interest rate hikes will not be the reason for markets to correct big time as we are at the end of the rate hike cycle."
A correction is also possible in the sectors which are doing well because of the government orders, Karmarkar said. "Assuming that government policies and orders will continue post the elections, corrections in these sectors are likely."
Bullish On Insurance, Private Sector Banks
Karmarkar highlighted that the Indian Insurance market is significantly underpenetrated. "But with the rise in per capita income in the lower strata of the population, the sector is beginning to see positive momentum."
In the short term, the insurance sector has been facing issues because of the underpenetration, fall in vehicle sales and claims during the Covid-19 pandemic. But over a longer period, the insurance space is going to be a great story, according to Karmarkar.
In terms of growth, private sector banks are set to outpace their public sector peers, he said. "Predominantly the growth will be driven by personal and retail loans, and that is why private banks, in all probability, will score over public sector banks."
Per Capita GDP To Grow Rapidly
Karmarkar said that India's per capita gross domestic product growth from $2,000 to $6,000 would happen rapidly.
The uptick in the per capita GDP will happen anytime between the next five to 10 years, he said. This rise in per capita income will fuel the economic growth as well as the stock market growth, according to him.
Hospital, pharma and insurance will be the themes that will be major beneficiaries from the rise in the per capita GDP growth, he said.
