Expect market to be under pressure: Nipun Mehta, Blue Ocean Capital Advisors

In a chat with ET Now, Nipun Mehta, Founder & CEO, Blue Ocean Capital Advisors, gives his views on the market. Excerpts:





ET Now: Where the markets headed given that all of the big macro and global events seem to already be digested?

Nipun Mehta: A good part of it might have been digested but we need to appreciate the fact that sooner or later the Fed will meet again and will announce tapering. It could happen in the next two months. It could happen later but as and when that happens FIIs can get out of equities and flow into safer assets.

Not much is expected of Q2 results. They could be one of the bad set of results that one has seen over several quarters. Results have been constantly falling over last two or three quarters. With interest rates hardening, investment cycle is unlikely to turn around soon. Also, higher working capital requirements for infra projects and the interest costs which has constantly been putting pressure on profitability will continue.

Interest rate sensitivities are likely to be under pressure. Deficits are another concern. There are concerns all round. Till there is a positive trigger that could pull up markets or which could indicate any potential change in economic situation, a serious upward movement is unlikely. The overhang of elections will also continue to be there. So, there is expected to be pressure on the markets on each rise.

ET Now: Give a stock name where you are allocating some money.

Nipun Mehta: We are looking at IT. In the pack midcap stock like Geometric Solutions come to mind. The company has good management, consistent growth. Given the company's domestic focus, the stock has not been affected by the global turmoil. It is also unlikely to benefit significantly from the currency movement. But, given the consistent revenues and profitability it is a good stock to pick.