Nivesh Ka Funda: Expect volatility in near term, says Jinesh Gopani, of Axis AMC; follow leaders in individual sectors

Stock Market are expected to remain volatile this year and action will be seen more in stocks than index, Jinesh Gopani tells Zee Business in the popular TV show 'Nivesh Ka Funda'. He said that the markets are likely to remain range-bound in the near term and will take a direction after the Q4FY22 earnings are announced.  

Gopani, who is Head of Equities at Axis Mutual Fund said that there will be stock-specific action as three important metrics -oil, inflation and currency will determine how companies report their March quarter earnings. 

Gopani said that the market will remain volatile and many black swan events have happened till now including Russia-Ukraine conflict, China's new corona wave.

The markets have also been volatile on news of the and US Federal Reserve interest rate hikes, he suggested. A meeting is scheduled later today.

The analyst was also of the view that crude oil below USD 100 will augur well for the domestic companies. Technology companies will deliver good numbers if Rupee is stable, he further said.  

'It is better to stay away and wait for some calmness to return to the market,' the Axis AMC analyst said.

He also said that predicting movement of specific sectors is difficult at this juncture as it is currently being dictated by news flows. 

Citing examples he said that experts recommended investments in defensive sectors like pharma when the oil price hit levels between USD 120 and USD130. Meanwhile, technology stocks gained traction when Rupee was depreciating. And when oil came back to USD 100, the financial sector gained prominence.

His advice is to follow leaders as no sectors could be ignored. 

Gopani said that in the last 7-8 months, Foreign Institutional Investors (FIIs) have sold USD 30 billion and still market has not correcting much. Nifty50 has been consolidating between 18000 and 16000. In a way, this is a very good sign that the market has not crashed because of domestic inflows.
At last, he suggested the investors to invest money in sectors that are showing earnings growth momentum for the next three quarters.

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