Low participation shows we’re in the early stage of a bull market, says Jhunjhunwala

NEW DELHI: The big bull on the Dalal Street, Rakesh Jhunjhunwala, partner, Rare Enterprises reiterated his view that bull market is still intact, although it could correct in between, but the direction of the market still remains on the upside.

In an interview with ETNow, Jhunjhunwala said that bull markets start with low participation, and end with humongous participation and we are still in the early stage of that.

Investors should not be worried about intermediate corrections as earnings are likely to grow and valuation are still near 2003 levels which is comforting.

It looks like market is pricing stocks with expectation of a resurgence in demand, which will ultimately lead to earnings growth.

Also read: Bigger bull market coming, will make us forget 2003, says Jhunjhunwala

Midcap and smallcap stocks have outperformed largecaps in last one year, but Jhunjhunwala reaffirmed his view that largecaps always tend to underperform at the start of a bull market.

Brushing aside market fears about export sectors, the Big Bull said Indian pharma and IT companies would continue to grow.

Jhunjhunwala said he was seeing a period of consolidation in the IT sector and the correction that the market has witnessed in software stocks so far in 2016 would end and ultimately the stocks will perform again.