'Export-Focused Stocks May Jump': Market Veteran Bullish On THESE Sectors If US Tariff Declines
Prashant Khemka of WhiteOak Capital said that from a sectoral perspective, financials will also likely do well because the 'recent stress' is going to be over.
Export-oriented sectors like textiles, jewellery, seafood, automobile original equipment manufacturing sectors will likely see a sharp rebound in case US tariffs come down to earlier expectation of 15–20%, said Prashant Khemka, founder, WhiteOak Capital said. He also noted there was no significant correction in the export-oriented companies' stocks.
Exchanges between Prime Minister Narendra Modi and US President Donald Trump around the occasion of Modi's birthday indicated a thaw between two countries. "The kind of negotiations Trump had with other countries also implies that the tension was a kind of negotiation tactic. The aim was to increase pressure on the other party,'' Khemka said.
Concerns of foreign institutional investors will be mitigated if the tariff situation improves. Six months ago, India was thought of alternative to China to the extent of erring economic growth. "That concerns should get addressed,'' he said.
According to the market veteran, India's has also lost its position as an outperformer in the global set up this year. Emerging markets are up over 25% with the China and South Korea surge 30–40%.
''The positive side of the temporary hiccup is that the government has pushed the paddle with new reforms. The next budget is six months away but there will likely be more policy reforms,'' he said.
"From a sectoral perspective, financials will likely do well because of the recent stress is going to be over. Investors need to be watchful of industrial and capital goods to see whether they sustain the momentum," he added.
According to Khemka, new age companies will likely see a lot of activities in coming months. "Many of these companies are not cyclical in nature because they are starting from an early stage in the capital markets."
"Despite the economy growing a percentage point lower or higher than 6%, these companies can sustain very strong double-digit growth. These companies will show profitability in the future," he said.
"The biggest indicator of a healthy market is often underestimated globally by policy makers. It channels capital towards entrepreneurs. So many entrepreneurs are able to raise capitals. There will be duds during the process," said Khemka.
"So many good outcomes will be delivered as fruitful ventures go on the path to become big ventures and create jobs. Many initial public offers getting oversubscribed is a huge positive," he concluded.
