Liquidity in the global markets aided improvement in market breadth in January 2020. However, the outbreak of coronavirus globally has put some brakes to the global risk-on trade. As a result of that we have seen some amount of correction in the global markets and some concerns about global growth, said Mahesh Patil, co-chief investment officer at Aditya Birla Sun Life AMC.

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On domestic market front, Patil said there are no major concerns but recently some issues that have come up on the banking side has put some pressure and market is still waiting to see how things pan out. Moreover, the budget 2020 too was a slight let down, he added in an interview with CNBC-TV18.

However, market to a large extent is driven by liquidity and there is enough liquidity globally, so we will continue to see good flows, he said.

“Domestically as well, after the recent move by the RBI there is going to be enough liquidity. So we don’t see major concern. We have come out from a cyclical bottom, we have seen the worst in terms of earnings. There could be small hiccups here and there on how the coronavirus pans out globally, and some issues on the banking side but broader trend of the market looks up and we expect modest gains from market in 2020,” Patil added.

Talking further about banking space, he added, “There is some amount of stress, which has emerged in recent times in mid-corporate side. It could be on the real estate sector, which is seeing some amount of pressure and more recently on the telecom side. As a result of that companies which had exposure to some of these names have seen some pressure because expectation of reduction in credit costs, which was anticipated around six months back, that number will take some more time.”

“There is some amount of increase in stress especially on SME, mid-corporate and real estate side. Banks or NBFCs, which have exposure to these are seeing pressure,” added Patil,

With regards to autos, he said the BS-VI transition could be more disruptive for 2-wheelers therefore the house would remain cautious on recovery in auto sector. A meaningful recovery in commercial vehicle segment would take 6-9 months, he added.d