Angel Broking - The Market resilience continues..

Views of Mr. Mayuresh Joshi (Fund Manager, Angel Broking):

"The Equity markets continued to exhibit strong resilience and continued their upward trajectory. The Q4 earnings season has kicked off and it shall be interesting to note the management expectations of few sectors especially consumer discretionary facing industries, IT companies, Capital Goods, Cement companies and telecom. With remonetisation expected to play its part partially reflecting in Q4 earnings the markets would ideally see beyond the same and a soft and tepid quarter is what the street is factoring in largely for the earnings season. BFSI shall be a space to be keenly watched out for as well and the general consensus here is the manner in which credit growth can meaningfully pick up and whether the asset quality stress both in terms of incremental slippages and restructured book going down would play positively on FY18 numbers. Rural and agrarian focussed moves by the Government in terms of budgetary allocations and sustained capital investments in core sectors like Infrastructure, power, defence and railways should have positive implications for GDP growth and general macro economic recovery. With GST expected to come through the efficacy in effectively implementing the same would remain key and have a huge positive impact not just from a revenue perspective to the centre and the states but to the entire organized sector vis-a-vis the unorganized players. The adoption of RERA shall have reposition being built in the real estate sector and with compliances mandated to be stringently followed; one ideally would look for imminent signs of demand recovery which shall lead to realization stability and improvement in sales velocity for the listed players. In a nutshell q4 earnings would largely be muted but recovery in earnings is expected by the second half of the coming fiscal which might justify the market multiples at this juncture. Can the market correct from the current levels....with liquidity remaining strong both from an DII and FII perspective the probability of a sharp correction looks bleak but if any global headwind emerges it can. Any sharp correction if it happens shall be quickly bought into in my opinion. So, one need to have a stock specific approach in these markets and go for quality rather than chasing anything and everything."

Source : Equity Bulls

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