How will IT sector perform in the next few quarters? Ashutosh Bhargava answers
«The rally has kind of surprised most people. From the start of the year till now markets are up close to 20%. It is on the back of improvement in global demand; global concerns which were there at the start of the year around US hard lending etc.
that has not played out and obviously the outlook on the interest rates have also changed,» says Ashutosh Bhargava, Nippon India Mutual Fund.Let us begin with the overall market itself right, we were just close to that 20000 mark. Went there in quite a bit of jiffy at least from 19000 to 20000 do you think after we hit that level there will be a bit of a consolidation or do you see more legs to the rally given how valuations and earnings are panning out?The rally has kind of surprised most people. From the start of the year till now markets are up close to 20%.
It is on the back of improvement in global demand; global concerns which were there at the start of the year around US hard lending etc. that has not played out and obviously the outlook on the interest rates have also changed. Indian market rally is a part of a bigger global market upturn.
Globally, also S&P 500 is up 18% of YTD. When we look at global market at this point of time, the construct of that market is improving. It is no more now linked to only technology stocks, so rally is kind of becoming more broad-based, and that would in turn would mean that FII flows which have been very strong the last four-five months perhaps would continue.
That is a different issue that these flows are predominantly coming in those sectors in India where the earnings support is very evident. Most of these are domestic cyclical, domestic demand-oriented name. So I think from here on, the dispersion in the market perhaps may
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