Domestic market has turned volatile on aggressive crude oil prices. In the view of most analysts, India will have to deal with hiking oil rates and inflation numbers at the same time in order to keep the market steady. Alroy Lobo, chief strategist and global head of equity asset management at Kotak AMC feels that higher oil prices will weigh on market sentiments and will remain as a key concern till oil prices come off. In addition to that, global events have been priced into the market and as a result, the revenue estimates will be shaved.
Talking about sector specific growth prospects, he said that he is constructive on the IT and outsourcing service sector. “IT and outsourcing services should show continuous growth in FY12,” he adds. He was also optimistic about the growth of pharmaceutical sector in India.
Besides being neutral on banking sector, he is underweight on infrastructure, real estate and capital goods sector in India. He feels that inflows were weak due to lack of retail participation; however, he sees a fair degree of valuations in the midcap segment.
Reacting on the RBI’s interest policy update, he said, “RBI is likely to hike interest rates to 50 to 75 basis points this year.”
www.moneycontrol.com
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