Very risky to take huge bets behind the cyclicals: Dilip Bhat

In a chat with ET Now, Dilip Bhat, Joint Managing Director, Prabhudas Lilladher, shares his views on the current outlook of the market. Excerpts:

ET Now: Are those, who are buying cyclical stocks, taking a big leap of faith?

Dilip Bhat: The markets are significantly ahead of the reality; a lot of optimism and expectations have been built. However, that could be partly attributed to some local event.

A factor is that we think that in the coming elections, we are going to have a stable government; that is a fair risk.

Hence, markets, without the liquidity support, is far ahead of the reality. The economic growth has been bad, yet the markets have done well.

If people are taking a huge bet on the cyclicals, then it is a huge risk as the market (after the event on Monday) can go up by about 100-150 points more on Nifty. At best, it could stabilise around that level for a month but gradually, it will be difficult to go beyond that. Rather, it would remain vulnerable to the downside.