Improvement in global scenario positive for markets: Nipun Mehta, Blue Ocean Capital Advisors

In a chat with ET now, Nipun Mehta, Founder & CEO, Blue Ocean Capital Advisors, shares his views about the market outlook:

ET Now: What is your approach right now? What would you tell investors to do? Should they hang on or do you think it is a good time to sell in this rally?

Nipun Mehta: When the market sentiment is positive and confidence and liquidity is coming around from the FIIs, it is difficult to argue against this kind of rally. But it is also time to be cautious. We have had a rise on the basis of FII liquidity, on the basis of various announcements as far as CAD getting lowered or fiscal deficit being in line is concerned.

Having said that, it does not really change a lot of current macro economic situation. As far as GDP growth is concerned, it is still a question mark. IIP data is not likely to be highly positive given the kind of statistics that is expected tomorrow or that we have been seeing over the last few months.

Probably, the improved global geopolitical situation and the fact that the US Fed tapering could get delayed further is another reason for this kind of confidence. But when you have industrialist talking of the fact that it is difficult to invest in India, gives a clear indication of difficult macro-economic situation that still exist. So, unless that categorically translates into visibility of earnings for the next few quarters, it is still time to be cautious.

Unless the market consolidates at this level, confidence is always going to be a question mark. Volatility expectations are going to be high, so we advise investors to be cautious till there is consolidation at the current levels.