Don’t see any major trigger for market: Piyush Garg, ICICI Securities

In a chat with ET Now, Piyush Garg, Chief Investment Officer, ICICI Securities, gives his views on the market. Excerpts:



ET Now: Do you think we are likely to have this sort of range trade go up until budget which is likely to be the next trigger for the market?

Piyush Garg: No. It looks like there is no major trigger for the market to go up or go down too much. Though the market did correct about 200-250 odd Nifty points from the top, but that was a correction because the market had run up quite a lot in the last four or five months and nothing goes up or down vertically forever. That was a natural kind of a correction which the market had. It is showing some kind of stabilisation in the last couple of days, including today and yesterday. The global landscape is quite decent. S&P is also making a new 52-week or multiyear high almost on a regular basis. In such a scenario where global risk-on is still on across the globe, it is difficult to pen down any reason why the Nifty should really scale down too much from the highs it made. Possibly at 5800-5900 or these kind of levels one should buy.

ET Now: What is it that sectorally you are advising your clients to buy at this point?

Piyush Garg: One of the reasons why the equity market in India is going up is obviously the global risk-on trade which is going on. Fundamentally, the worst phase for the economy may be behind us. One can never be sure, but as of now it looks that into FY14, you will have better GDP numbers, you will have better growth numbers and there is a reasonably good chance of RBI also cutting rates, though I am not in the camp that RBI would cut 100 basis points. I am more in the camp that another 25 to 50 basis point rate cut may happen. But more than rate cut, one has to see that the monetary policy transmission happens in a very fair manner in the sense that you need to see interest rates going down in the economy for the wider economy or the wider section of the economy. You need deposit rates to go down, you need to see lending rates to go down.

So, some of the policy initiatives which the government has taken take time. It generally takes 4-8 months or a couple of quarters for the results to filter in. All these things put together, the macro trend which was on the declining side for last two years may tend to reverse. A lot of these factors on the current account front, interest rate front, and on the GDP growth rate front would tend to improve. We should bet on sectors which would benefit from this like banking, infrastructure, capital goods, and auto.