A durable rally could emerge from these levels; 4 sectors would be best bets: N Jayakumar
N Jayakumar, MD, Prime Securities, says despite ongoing market challenges, financials are the best investment option for the next rally. Additionally, the dollar-rupee exchange rate will benefit the pharmaceutical sector, particularly generics and exports. The IT sector may also see gains, with some benefits reaching consumers. Moreover, India's manufacturing and Production-Linked Incentive (PLI) initiatives will attract investment alongside financials.
For a market where bulls were looking immortal, they are running for cover now. At the beginning of the year, the general narrative was that we are in for a good year. Now everyone is guessing what is coming next. What is your view on what lies ahead for us?
N Jayakumar: The way I see this is that complacency had set in in a pretty major way and we saw that the last six months gave virtually no returns. Indices did not fall by more than 8-10% and yet portfolios were down 15% and 20%. Individual stocks were down up to 30-35%. Complacency had settled, people said it is a buy on dips. Now that particular thesis, in a sense, got challenged with this most recent correction. In the last few days, especially the last three-four days, I have seen all around capitulation coming through.
To my mind, the fear that has set in and this got exacerbated with Trump coming through where people felt that the next best thing was to invest in the US. So, people rushed for the US dollar. People rushed to get out of other markets. The currency has weakened. The dollar-rupee has moved
