Stay focused on quality largecaps, avoid mid, smallcaps: Hemindra Hazari

In a chat with ET Now, market expert Hemindra Hazari talks about whether one should strictly look at largecaps at present juncture.

ET Now: Healthy gains are made when you buy stocks when the market trend is not with you. Blue chip stocks such as Bajaj Auto, Sun Pharma, Infosys and TCS have all fallen around 15-17 per cent. Even HDFC Bank is now trading at sub-Rs 1,000 levels. What is your view?

Hemindra Hazari: Quality stocks are where one should always get into when the sentiment turns very bleak.

ET Now: The sentiment is bleak, but it is not very bleak.

Hemindra Hazari: Exactly. When stocks hit a lot, then there remain expectations that they will bounce back. But nothing bounces back without a reason. There has to be some stimulus for the scrip to bounce back. That is why I am insisting that this is the time to go in for quality counters.

I am not in favour of going into a lot of mid, smallcap stocks because as a sector they get devastated in a slowdown.

Already the RBI data showed that companies with a turnover of less than Rs 100 crore are being wiped out; those with less than Rs 25 crore sales are witnessing a decline of 50 per cent on the base. So, it is better to be in largecaps because even if they see a slowdown, they tend to squeeze smaller players. Therefore, the names you have mentioned are some of the quality players in those sectors.