India remains a stock pickers’ market amid turmoil in global equities

Domestic mutual funds have delivered superb returns over the past two years aided by a bounce in the stock market. But as volatility rises in the equity market because of global headwinds, it might be difficult from fund managers to replicate the returns recorded in the last couple of years.

However, India still remains in a bull market, and mutual fund managers are confident that they will be able to do a good job and not disappoint investors.

Anoop Bhaskar, head of equities at UTI Mutual Fund, said: “We might face a more challenging environment over the next two-three years, and hopefully not give negative returns. We are in a bull market despite the global headwinds, and midcap stocks which are large in number can still create alpha for investors,” he said.

The S&P BSE Sensex is down over 4,000 points from the highs it hit in March. The index has already wiped out all the gains made in 2015, down nearly 7 per cent, weighed down by both global as well as domestic factors.

Domestic factors such as weak GDP growth in April-June, a slowdown in manufacturing output, below-average monsoon and weak corporate earnings growth have weighed on sentiments.

However, a large part of the correction in the market was largely due to global factors such as economic slowdown in China and uncertainty around a rate hike by the US Federal Reserve, which has kept investors on the edge not just in India, but across the globe.

Experts feel India has always been a stock pickers’ market. There are always opportunities at a macro level, and investors with a time horizon of 2-3 years should look at buying on dips.

Prashant Jain, ED & CIO, HDFC MF is of the view that India has been in a perpetual bull market for the last 2-3 years. And, after the recent correction, he feels the market is trading at attractive valuations, and equities will still beat returns of other asset classes.