ETMarkets Smart Talk: Banks, cement, Infra among 7 themes that could lead next leg of rally: Jiten Parmar

economictimes.indiatimes.com:

“Banking, cement, infra, paper, sugar, power and chemicals (as a contra bet) are some of the sectors where we still see reasonable valuations in some pockets,” says Jiten Parmar, Co-Founder, of Aurum Capital.

In an interview with ETMarkets, Parmar said: “Many pockets look expensive. One has to look at individual stocks, for example, many stocks from defense, and railways do not have a margin of safety and are looking stretched,” Edited excerpts:

Nifty hit 20200 levels and then we saw some bit of healthy profit-taking amid muted global cues. What is your take on markets for the medium to long term?
For the medium term and long-term, I remain constructive on the markets. Indian economy is doing fairly well.

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Direct and indirect tax collections have been robust. GST collections are good. The formalization of the economy and compliance is increasing.

But there are some immediate challenges for the markets. There is a slowdown in the US and Europe, tapering is further pushed out and in fact, there could be more raising of rates before they start coming down.

Crude recently went to 95, the China situation is worrisome and not clear, and the spread between Indian 10-year vs. US 10-year government bonds is at a historic low (see chart below – source — highcharts.com). Hence, we are seeing some outflows. Markets seem to be ignoring this.

We have not taken money out of India and continue to like it on a medium to longer-term basis: Jonathan Schiessl

Apart from these, there are important state elections and