ETMarkets Smart Talk: Stay away from volatile stocks especially smallcaps ahead of election season: Sonam Srivastava
“With the election buzz around the corner, steering clear of volatile stocks, especially in the smallcap realm, would be smart,” says Sonam Srivastava, Founder and Fund Manager at Wright Research, PMS.
In an interview with ETMarkets, Srivastava said: “Considering the delayed festive season, placing bets on the consumption narrative, commodity and energy sectors, sizable banking and financial entities, and IT stocks, which have caught the eye of FIIs, could be a strategic approach to capitalize on the present dip” Edited excerpts:
We have seen markets coming down from highs in both Sensex and Nifty. What is fueling the fall – is it the combination of a rise in US Yields and geopolitical concerns?
The Sensex and Nifty have seen a notable correction lately, which seems a bit out of place considering India's strong growth narrative.
Unlock Leadership Excellence with a Range of CXO Courses
Offering CollegeCourseWebsiteIIM LucknowIIML Chief Operations Officer ProgrammeVisitIIM LucknowIIML Chief Marketing Officer ProgrammeVisitIndian School of BusinessISB Chief Digital OfficerVisitHowever, digging deeper, the rise in the US yields and the intensifying geopolitical drama play a big role in this. The US Federal Reserve's bold moves to tackle inflation have pushed up the US yields, making emerging markets (EMs) like India less attractive for foreign capital, resulting in outflows.
On the geopolitical front, the escalating situation in Israel, with heavyweights like the US, Russia, and Iran stepping in, creates global ripples.
This turmoil has bumped up crude prices, which spells trouble for India's inflation and current account dynamics. And with the world's jitters, there's a rush towards the safety of the U.S. dollar.
