Help us with your take on the markets because seems like it is a break on the rally that we have already seen in the markets of late and they are seem to be reversing at least today. What sense are you getting from the markets right now, help us understand that? Have we already seen a near-term top for our markets?
Dhananjay Sinha: So, there has been a relief rally since, I would say, early this year when the Trump tariff fears were there and the way it was panning out, there has been an easing of the anxiety levels with resumption of talks and all, that is something that has permeated across markets and our markets also participated in that.
Secondly, there has been a constructive positioning that the government and RBI has taken by way of easing regulatory restrictions or tightness on the banking sector on the lending side and also the aggressive monetary easing that RBI did including CRR cut, rate cuts, liquidity infusion, etc. So, all those things have actually played out in terms of how the market has actually responded. I would say that these are rebounds notwithstanding the fact that Q4 results were fairly modest, growing at roughly about 5%.
If we look at Nifty and what appears to be now kind of weighing on the market after the rally is that you have an upcoming results season wherein the expectations might be or the actual results may be somewhat more sober compared to what the market may have actually priced in. So, there is a certain amount of restraint that is observed in the market after the big rally and also that you have this whole tariff thing is also coming back after the end of the three months moratorium on tariffs, how does it shape up going forward is second variable to look at and third is with respect to what happens to us Fed rate and all.
So, you have both domestic and global variables all playing out in the market and hence what we are seeing is a kind of cautious scenario after a rebound. And my expectation is that for quite some time the market will actually see a rotational strategy being adopted at different points of time. So, I would say investors will need to be nimble enough to ride those switches as it happens.
The kind of sector churn we have seen, one week you have banks that are leading the force, then you have it, now you have since the last couple of trading session metals that is seeming bright. Amid a market like this, which sectors do you think could offer some sort of safety net for investors?
Dhananjay Sinha: So, I would say that one thing that is coming out is that there can be a renewed focus of the government on reviving household income and consumption. The government has announced the employment incentive scheme yesterday. So, some of those things which are relating to consumption ideas selectively can actually do well. I would say, as far as, the banking sector is concerned and lending in general, I would say there has been a significant rebound there because of the cheap valuations and it was kind of a very cautious or precautionary element that was exhibited in the way some of the private banks have rebounded given their cheap valuation.
But importantly, if we see the results, what we are finding is that the banking sector is seeing a significant deceleration in business if you look at the credit growth, etc. So, I would say that the banking sector has seen its rally. I would say that flows would actually start favouring other segments. Intermittently, these segments will rotate. There is a flavour, as you said, with respect to the metal space especially copper related segments and companies relating to non-ferrous sector, I would say that is another one. I would say, within autos what we like is basically tractor names, two-wheeler names.
There is a significant issue with respect to rare metals and the supply of rare metals and magnets utilised for EV vehicles and also, I would say, conventional combustion engines, cars could also see certain headwinds with respect to supply. So, I would say, it has to be a little cautious on the auto side. The market cap will switch in favour of two wheelers and more importantly tractors. Agri input is something that we like and, of course, a lot of FMCG names. And we are seeing also defence is actually positioned well because of the geopolitical landscape that is panning out.
