ETMarkets Smart Talk: Bubble building in public sector enterprises and SME stocks, says Rakesh Pujara

economictimes.indiatimes.com:

“Public sector enterprises (PSEs) have performed well in this market rally, there could be some froth in that space, further a lot of SME stocks are also skyrocketing, and therefore a caution is advised in that space as well,” says Rakesh Pujara, Founder and Managing Partner at Compounding Wealth Advisors LLP.

In an interview with ETMarkets, Pujara said: “The beauty of bubble is to ride it and one must have some rule-based framework to get a timely exit from the hope trade,” Edited excerpts:

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Q) Nifty50 witnessed some volatility post-Budget, but it has managed to hold on to crucial support levels. What is your take on markets in February?

A) Markets are in a strong bull grip; however, some blue chips and pivotals are lagging behind smallcaps & midcaps, and Bank Nifty is showing weakness, particularly in private banks whereas PSU banks are scaling new highs.

So, this market is a stock pickers paradise, and sector rotations are very active. IT index has joined the bandwagon and is within striking distance of its all-time highs.

Q) Now that the Budget is over, are there any events (global or domestic) that can disrupt market momentum?

A) None of the markets whether global or local are showing any sign of weakness & this being election year in India & US markets are