Adverse developments on the new COVID variant front could also impact investor sentiments globally, he said in an interview with CNBCTV18.com. Besides, two local events are on his watch list that may dictate the direction and momentum in the market: the Union Budget and state elections.
Jasani believes it is difficult to say confidently whether the worst of COVID is behind for Indian investors. “With every outbreak of (COVID) variants, the negative impact gets lower and lower,” the market veteran said. He is of the view that any delay in global and domestic economic recoveries may lead to some fatigue in the market.
India, being one of the preferred emerging markets traditionally, could still continue to enjoy premium valuations “in case we see good upward momentum in earnings and Nifty EPS”, he said.
And how to go about it now?
“One will have to maintain asset allocation for equities at the planned levels and in case it has come down, a gradual rise can be undertaken,” suggests Jasani.
As of Tuesday, the Nifty50 is 1,371.2 points below its all-time high of 18,604.5, touched on October 19.
Here’s how the 50-scrip index has fared since January 2020:
Jesani sees a “very small chance” of the headline indices reaching new heights in the next quarter. “We need more confirmation of COVID issues getting diluted, global growth picking pace, inflation across the globe coming under control and rate hikes being undertaken at a leisurely pace before we can expect such a thing to happen,” he said.
Which stocks to bet on now?
It is the right time to bank on defensive stocks, from spaces such as FMCG, pharmaceutical and IT, believes Jasani. They are good bets now till more clarity emerges on global growth and inflation, though they may not be cheap, he elaborated.
Defensive stocks…
Read More: Union Budget, Elections May Impact Market Momentum: Hdfc Securities’ Deepak