Is it time to start buying the fear and volatility now? Prateek Agrawal answers
Prateek Agrawal, MD & CEO, Motilal Oswal AMC, says if we see more drops this month, it’s likely we’ll witness a bottom formation. There’s some positive news to highlight. The GST collection figures were solid. Although the GDP data for Q2 didn’t meet expectations, it’s clear that mining and electricity were the two sectors that dragged it down. The slower growth in those areas was mainly due to improved monsoon conditions. As we move into Q3, we can expect to see better numbers. There’s definitely a sense of optimism around.
It has been quite a yo-yo kind of a market. The excesses in the market are over, is it time now to start buying the fear and volatility?
Prateek Agrawal: That has been our thought for some time now. Typically, we have seen that a 5% to 6% kind of a correction is a good correction. And buying comes in. This time around, we saw intense selling in the month of October. November saw a reduction. Now, if this month sees further reduction, chances are good that the bottom formation that we are talking about happens. There is some data to cheer about. The GST collection data was good. While the GDP data for Q2 was lower than expected, very clearly there were two spaces which pulled it down, mining and electricity.
The lower growth there was clearly on account of better monsoons. As we get into Q3, chances are we get to see better numbers. There is definitely hope in the air.
Sectors will drive this better number perhaps. Do you think consumption would be the one to bounce back or do you think it will
