Sandip Sabharwal, asksandipsabharwal.com, says “it is important for the froth to go out because there was too much speculation happening in too many segments and although optically the index has hardly fallen, when we talk of the correction on the largecap side the index, there is hardly any fall – 2% off the top. But the real pain has been on the smallcaps and to some extent on midcaps. I would think that valuations in that segment are still somewhat higher. I do not think the entire correction should be over as of now.”
Sabharwal further says he is still sitting on 12-15% cash, waiting to see where the entire dust settles because «we have had a correction but there could be some more way to go.»
Are we in for a pre-election rally? History tells us that markets in the run-up to the election have rallied. Will 2024 be different?
Sandip Sabharwal: It could be different because we have already had a decent size run-up, so if you look at it, one month prior to election is one thing but starting right from October till now, the markets have had a sharp run-up and globally also markets are looking a bit jittery with inflation being sticky and there have been possibilities of a global correction.
I would think that the possibility of some correction is higher. Now that thesis could play out if markets correct from here till April and then rally somewhat in May, so that is tough to predict.