As recently listed Indian Renewable Energy Development Agency Ltd. hits lower circuit after a rally of seven days, Nischal Maheshwari, see this "as a clear sign of money or retail chasing" for assets.
"We are in early stages of bubble formation because the economy is still doing pretty well," said Maheshwari, chief executive officer of institutional equities at Centrum Broking Ltd. The world economy is also doing well, with the interest rates going down, which may go on for a while, he said.
With the Indian benchmark indices touching fresh life-highs Friday, Maheshwari sees a good time ahead for the markets and less problems on the horizon. However, "it's not time to acquire", according to him.
"I think you should be 100% invested, there is no question about that. Basically, I still see there is a good upside in this market."
Maheshwari also pointed out that the lower interest rate scenario might be good for equities and asset classes like commodities. Equity should be overweight, rather than focusing on looking at other assets to be a part of the portfolio, according to him.
Maheshwari is positive on metal and chemical commodities that have not performed well in the past, but will benefit with the reducing interest rates. Banks, auto, real estate and IT are other sectors that will benefit from rate sensitivity and need to be considered in the portfolio.
"You are in a goldilocks scenario, clearly, as far as banking is concerned." This scenario will continue for the next one and a half year, he said.
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