Metals sector to see correction in the medium term, according to market expert Jai Bala

Sensex and Nifty ended more than half a percent lower on Friday and slightly lower for the week. The market ended its two-week streak of gains amid concerns, which were largely global in nature.

In an interview with CNBC-TV18, Nilesh Shah, managing director of Kotak Mahindra Asset Management, said he expects the industry and home improvement segments to outperform in the coming quarters.

“To date, we have generally been optimistic about manufacturers pending capital spending. While infrastructure and government spending are visible, we believe that, led by the cement, steel and sugar sectors, even private sector investment should be revived in the next two quarters. We were also optimistic in the home improvement segment.

“We believe in the residential market and the home improvement market, there will be good volume demand for tiles, paints, electrical appliances, cables, wires, etc. These are the two areas where we can see a clear outperformance over the coming quarters. “

He said that with the metal being a commodity, there is bound to be a correction and a downtrend. It remains underweight the sector.

“We believe that since metal is a commodity, prices cannot continue to rise indefinitely. There will be a correction and a downtrend. In the space of metals, we still believe that copper, aluminum , steel is the pecking order in terms of attractiveness. So subject to companies reducing their debt or companies for which unused capacity, additional capacity is put into service in the near future, we generally have underweight the metals sector. ”

Jai Bala, CMT at Cashthechaos.com, said that if Nifty manages to stay above 16,160, another record for the markets cannot be ruled out.

“If you look at the Nifty, the markets have one more leg to go up and finish the streak. Form looks incomplete to me at the moment but as long as the index manages to stay above 16,160 I think that there is one more record pending for the larger index. However, the larger markets already appear to be rising. “

He expects the metals sector to undergo a correction in the medium term.

“I am looking at metals experiencing a medium term correction. I think the top is reached and 5,300 to 5,350 was an important level for Nifty Metals, it has come to that level and is showing medium term correction charts. “

Bala advised retail investors to switch to 100% cash. However, he expects FMCG, IT, HDFC and Reliance to lead the final leg of the rally in the markets.

“The strategy to take right now is that you should be raising cash beyond 50% of your maximum capacity. Retail investors can go up to 100% cash. last stage of the market. So the last step that I anticipate for the market will come from the FMCG names, the computer index and if the weight is not enough, probably from HDFC Limited or Reliance. “

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Disclaimer: The opinions and investment advice expressed by the investment experts on CNBCTV18.com are theirs and not those of the website or its management. CNBCTV18.com advises users to consult with certified experts before making any investment decisions.

First publication: STI


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