Market Outlook With Anil Singhvi: Valentis Advisors' Jyotivardhan Jaipuria speaks on Covid-19 fears, sectors he prefers and more

Zee Business Managing Editor Anil Singhvi today said that while rising Covid-19 cases indicate the virus is impacting the health of the people, the related sharp fall in the markets is also threatening to destroy investors' wealth. The Market Guru invited Jyotivardhan Jaipuria, MD, Valentis Advisors on his show and asked about his view on stock markets from here on, what should investors do, and sectoral preferences, if any.

Jaipuria said that markets have doubled from the lows made last year. Since they have moved up sharply and valuations have increased, consolidation was due in the markets. He said that the second wave of Corona is one of the key reasons why the markets are correcting. He notably added that investors should take the opportunity to buy on dips because s vaccinations drive has picked up momentum. "Investors should invest in markets on dips and not miss out.  US Bond Yield Increases Will Put Pressure On FIIs Investment and market may remain weak," he said.

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Jaipuria said that Europe and the UK also witnessed 2nd wave of Corona, however they were able to contain it. It is expected that in India, next 4 to 6 weeks will be crucial and this tight phase will also pass. Government has implemented some lockdown measures which will help the spread of Virus. Vaccination will be crucial and ensure less people get infected.

कोरोना, US बॉन्ड यील्ड बढ़ने से FIIs निवेश पर दबाव दिखेगा: ज्योतिवर्धन जयपुरिया, वैलेंटिस एडवाइजर्स #COVID19 #StockMarket #FIIs @AnilSinghvi_ pic.twitter.com/ZfCKqRxIMO

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Jaipuria said that markets are seeing price correction and hence consolidating from higher levels. Q4 FY21 results will be strong while Q1 FY22 numbers are expected to be weak due to lockdown measures being implemented. Economy will remain strong for the next 3 to 4 years and will benefit the earnings of the corporate. It is expected that earnings will double in the next 4 to 4.5 years. Jaipuria said that they will deploy cash which they are holding and will buy into the fall and invest in the markets.  

Jaipuria said that increasing commodity prices is good for commodity companies. However, companies which buy these commodities and use them as raw materials will be adversely impacted as their margins will come under pressure.  The margins of these companies may remain under pressure for the next 2 quarters but later on, due to strong demand, these companies will be able to pass on the higher cost to the customers.

Jaipuria said that logistic cost has also gone up sharply. Freight rate has moved up for exports. Containers are not available in the current scenario. The salary cut which was witnessed last year has been increased from this year. Demand has improved sharply despite cost reduction in the last 2 to 3 quarters of FY21.

Jaipuria said that since September he has witnessed earnings upgrade every month. These upgrades are seen after many years in the markets. He said earnings were downgraded for the past 7 to 8 years, things are changing now. Earning will continue to remain strong, except for 1 or 2 months due to the current scenario.

Jaipuria said that the Pharma sector looks extremely strong; margins of the companies were looking weak earlier. Now it is expected that the margins will improve. He said that the Cement Sector and Auto Ancillary sector look good as they are going to see some earnings in next 2 to 3 years. Banking stocks will become attractive if they fall further.