Global markets are currently experiencing heightened geopolitical uncertainty owing to the Middle East conflict, which has left its mark on Asian indices on Wednesday, including India, with the Nifty trading with cuts of around 2%. But this could prove to be an excellent opportunity for investors to build long positions, according to Vikas Khemani, founder and CIO of Carnelian Asset Management and Advisors
Speaking to NDTV Profit, Khemani said the current volatility is not necessarily linked to business reality. "These are the best times if you ask me to do stock picking. Right now, most of the stock prices don't necessarily go up or down based on the fundamentals, but based on the short-term newsflow and the fear," he said.
Sectoral Outlook: Banking and Energy
Khemani offered his thoughts on certain sectors, including banking and energy. He argued that the banking sector, in particular, has its structural growth foundation still intact despite the short-term disruptions and margin pressure.
"In banking, [the situation] does not change anything structurally from a long-term perspective," Khemani noted. "If you like a particular bank or sector or company, you might look at investing at this point in time... I'm sure the story will be back to normal growth."
As for the energy sector, which has been reeling from volatility, Khemani believes the sell-off could be due to fears of oversupply in the markets rather than the geopolitical conflict. He advised investors to "overlook" temporary impacts if the "predictability of the growth is there."
The AI Shift in IT
While the IT sector has faced significant pressure, Khemani remains cautiously optimistic, suggesting that "the current AI disruption may not be as bad as the market is making out to be."
"All the companies have to go through the transition, change, adaptation, whatever needs to be done," he said. While Carnelian remains "underweight" on IT for now, Khemani is actively "doing our work" to identify which firms will emerge as winners in the AI era.
"Those are the businesses to be bought, where the sentiment has impacted the price, but the long-term doesn't change," he concluded.
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