Be cautious on auto, realty stocks

ET caught up with Ambareesh Baliga, VP, Karvy Stock Broking Ltd to talk on interest rates and impact of fiscal stimulus withdrawal on auto and realty stocks.

What's your sense that auto stocks have to the news of a fiscal stimulus withdrawal?
There would be a phase out whether the government does it immediately or over the next two or three months. Interest rates would move up and would have a negative effect on the interest rate sensitives.

One should be extremely cautious as far as auto is concerned and going ahead, it would be quite difficult for them to keep pace with the history, they created in the last 6-8 months. The other space which is negative is realty, as far as the interest rates are concerned, the inventory levels are high, so even at these levels, one can still sell.