Cherry picking domestic stocks imperative: Rajat Rajgarhia

In a chat with ET Now, Rajat Rajgarhia, Director, Research, Motilal Oswal Securities, shares his view on the current market condition:

ET Now: How do you anticipate the current situation for the markets?

Rajat Rajgarhia: Usually, markets always see a knee jerk reaction in these type of situations. Both the currency and the markets react quite wildly in today's times. That is why we see 2.5%-3% down for the market, or 2.5% down for the currency.

Typically the buyers just vanish from the market and even a little bit of a selling just creates a big impact. We will have to go through some of these times where news, rumours and actual events will create impact on to the markets.



ET Now: What is it that you are advising clients to do?

Rajat Rajgarhia: There are two things which are quite evident. The rupee is weak and we do not expect it to be at the levels of 68-69 that we saw previously.

Even if it hovers between 63 and 65, and considering that US has been showing good recovery, some of these companies which are beneficiary of these trends will do well. Therefore, technology, pharma are some of the commodities that continue to do well.

Within domestic market, you will have to really cherry pick stocks. You will have to look at something like an HDFC Ltd. which also falls in this kind of a market but is far more resilient to the domestic issues.

You have companies like Hero MotoCorp which also probably will do well on the back of the good monsoon. So, stick picking is very very important.

As a sector theme you still have to focus on companies which are earning in dollars.