Thinking to bet on FMCG? Look at these sectors instead, says Ajay Bagga

economictimes.indiatimes.com:

Independent market expert Ajay Bagga says we do not know if the buying in FMCG stocks is a function of defensiveness or a re-rating of the sector. “If it is a re-rating, it is ahead of the curv,” he told ET NOW in an interview. Edited excerpts:

Global cues are strong but Indian indices were on a downward spiral. FII selling was one reason. But what is the bigger reason? Are pre-election jitters creating nervousness or is India's expensive valuation over peers?

It is the election jitters and you cannot help it. It is going to go on for the next three weeks. June 1st, Sunday night, is when we get the first exit polls, but that will not give any kind of substantive relief to markets. Only on June 4th afternoon when you get the major trends through, investors will finally settle down. So, there is no way anybody who is seeing 98 crores electorate is going to get this right on a very consistent basis. In fact, only three rounds of the polling have yet gone through and you are seeing the impact on the market. So, a lot of fake news, a lot of fake media, a lot of assertions from both sides, a lot of negative campaigning, and a very extended six weeks of election season have left a lot in terms of people's imagination. But I have seen this every time. In fact, I remember in 2009, there was a big chance that one of the regional party supremo, she would become the prime minister and I had had to present a paper on that to our headquarters in Frankfurt at that time and analyse what it could do to the firm that I worked in at that time. So, election season brings its share of uncertainty. What one would have wished for was that we get a 15-day elections and a done over with instead of these six weeks which is killing the markets.