“This sell-off was required,” says Ajay Srivastava of Dimensions Corporate Finance Services
Mumbai: The sell-off in the market continues amid weak macros and negative global cues. In fact, the benchmark Nifty 50 broke the 15,700 levels for the first time since March 8, 2022. Broader indices too slipped with all sector-wise indices trading with a negative bias. ET Now spoke with market veteran, Ajay Srivastava, CEO, Dimensions Corporate Finance Services on how to navigate this market mayhem and volatility. He says, “This sell-off was required as the Indian market continued to be over optimistic.” In his opinion, we are now headed towards a situation where we can visualize the bottom.
He believes that it is not wise to sell now but it is in fact a good opportunity to buy as some sectors have been oversold. He expects the commodity sector to be a winner when the recovery happens. In his opinion, banks offer the best opportunity. Additionally, he terms banks as ‘qualified loot’ and foresees a mega profit-making opportunity at this point of time. However, in his opinion, smaller banks are in serious trouble given the sheer competitive intensity of the industry. Nevertheless, these small banks are investment candidates only from an M&A perspective and not a fundamental perspective. He says that fundamentally smaller players have no reason to survive.
The volatility in the market persists, with India VIX jumping over 15% in the trading session today. While the fall in markets has been supported by buying from domestic investors, the biggest risk for markets right now is the outflow of domestic investors which could be possible if FD rates go up to 8-9% which could be a possibility given the rising interest rate environment we are currently in. To sum it up, Mr. Srivastava believes it is a good time to buy but one has to be mindful of near-term uncertainties.