Is this a sentiment driven rally or a flows driven rally and should we sell off? Anand Shah answers

economictimes.indiatimes.com:

Anand Shah, Head- PMS & AIF Investments, ICICI Prudential AMC, says, this is a market which has strong legs of earnings and one needs to be very focussed, very careful and continue to buy the right businesses which will benefit from a multi-year growth which is a very clear possibility as the stars are aligned today.

Where do you think the entire volatility of the election cycle would kick in? Today, we are not talking about it, but soon we will start talking about it. Historically, we have seen that the election cycle in India is always a swing event. It is not a binary event, but a swing event. What should one do?
Our experience of the last 20-23 years is that notwithstanding the macro risks that exist in the market, focussing on stock picking, identifying the right businesses has actually paid off very well. To be very honest, many of the macro risks had a much larger impact than elections – be it the global financial crisis or more recently Covid. There would always be external forces which will push down markets and one needs to be cognisant of that and that is why the asset allocation of an individual is very important.

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But sticking to the basics, sticking to the right businesses that can withstand the volatility both macro and micro and then come out winner out of it, helps. We have seen even in this cycle that it is not a very symmetric up move in the market. We have seen significant divergence. Manufacturing, which has survived, has done extremely well, whereas many