Small & midcap stocks may be headed towards a pre-election rally: Abhishek Basumallick

economictimes.indiatimes.com:

Abhishek Basumallick, Founder & Chief Equity Advisor, Intelsense Capital, points to two sectors which have not been in the public limelight, chemicals and insurance. “While I am pretty bullish on insurance, chemicals sector is getting to the stage where we are probably seeing bottoming out in the businesses and things could turn around in the next 12 months,” says Basumallick.

He also points out that IT and banking may also see a turnaround but that will take longer.

Let’s discuss the market momentum right now and it is clearly favouring the small and midcaps. What do you make of the way forward because on one hand, there is always the challenge that it is probably getting towards the frothy zone as the valuations are expensive in smallcap and midcap, but the market mood is such that they clearly want to buy more of that?
Abhishek Basumallick: The point that you are making is very true as there is uncertainty in the minds of investors. But personally, I think that small and midcaps could be headed for a pre-election rally and it is going to be very interesting to see how the largecaps behave, but the next couple of months should be very interesting for the mid and smallcaps.

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Elections are coming up in India as well as the US. Both are significant events for the market