Q. Let’s begin with the market sentiment. The stock markets have been quite volatile lately. What’s your current view on the market?
Sonam Srivastava: The 25,000 mark has become a psychological barrier. We are cautiously optimistic at this point. The market has underlying strength, particularly in small- and mid-cap stocks that have reported strong earnings recently. In such a volatile environment, the focus should be on high-quality and trending stocks, while keeping an eye on global developments.
Q. Q4 results have been muted, with Nifty 50 earnings growing less than 6% YoY—below street expectations. What’s your take on this?
Sonam: I actually find this quarter slightly encouraging. In previous quarters, downgrades outweighed upgrades. This time, we’re seeing more upgrades, which is a positive sign. Especially in the broader market, some standout results indicate we could be at a turning point in earnings growth.
Q. Are global factors playing a bigger role in impacting Indian markets currently, or is it more of a domestic story?
Sonam: It’s a mix of both, but global factors are very influential. For instance, US regulatory changes have pressured pharma stocks. Rising yields in the US and no rate cuts by the Fed are affecting investor confidence globally. However, domestically, we have strong positives—RBI is injecting liquidity, inflation is cooling, consumer confidence is picking up, and we might even see accelerated rate cuts. So, companies with a domestic focus may be better positioned right now.
Q. Which sectors look promising for the next quarter or near term? What should be the portfolio strategy?
Sonam: Sectors with strong domestic drivers like industrials, capital goods, and consumption are showing strength. The FMCG sector could benefit from a good monsoon. We also see momentum in defence, railways, and private banking. Allocating across these sectors with a focus on quality makes sense right now.Q. Should investors go all-in at this stage or adopt a more staggered approach?
Sonam: Given the resilience in the market and the ongoing global uncertainties, it’s best to take a balanced approach. Start building positions in high-quality stocks, especially those currently undervalued. Holding some cash or investing in multi-asset funds or gold can provide a cushion. But yes, it’s a good time to gradually build equity exposure.
Q. Are there any sectors that may underperform in the near term? How should investors hedge against them?
Sonam: IT could remain weak due to muted earnings and unattractive valuations, driven by weak global demand. Certain PSU segments also appear overvalued—investors should be cautious there. Diversification across sectors remains the best hedge against such risks.
Q. For 2025, are there sectors where retail investors should be overweight?
Sonam: Yes, industrials, consumer durables, private banks, and agrochemicals—especially with a strong monsoon—look promising. Defence and railways also have tailwinds. Investors can consider overweighting these sectors while maintaining a diversified approach.
Q. Could you name some specific stocks from these sectors that look strong both fundamentally and technically?
Sonam: In capital goods, L&T is a solid pick. For defence, BEL and HAL look attractive. In agrochemicals, Coromandel and Avanti Feeds stand out. Among private banks, ICICI Bank and Kotak Mahindra Bank are good options currently.
Q. So would you say this is a “buy on dips” kind of market?
Sonam: Absolutely. This is a great time to accumulate quality stocks at attractive valuations. If you’ve been eyeing certain stocks, now might be a good opportunity.
Q. What is the near-term market outlook?
Sonam: We may see some consolidation around 25,000 on the Nifty in the short term due to global pressures. But the broader market—especially small and midcaps—looks very promising with solid earnings and growth prospects. It’s a good time to start building positions for the long term.
Q. For someone entering the markets for the first time right now, what’s your advice?
Sonam: Start with a diversified portfolio. A core-satellite approach works well—use large and midcap funds or multi-asset strategies for your core, and build a satellite allocation in high-potential sectors like defence, FMCG, or chemicals. That way, you’re protected while still capturing opportunities.
Disclaimer: Recommendations, suggestions, views and opinions given by the experts/brokerages do not represent the views of Economic Times.
