“I would focus a lot on the financials,” said Ashwini Agarwal, Co-Founder and Partner of Ashmore Investment Management India in an interview to CNBC-TV18.

Share Market Live

NSE

“Financials are still relatively inexpensive compared to where they have been historically. If you make a case that there is going to be more stimulus and that the economy should continue to do well then financials is the area where you will see a significant amount of upside,” he said.

Agarwal is positive on IT and pharma as well.

“I would also say that both pharmaceuticals and IT have relatively underperformed over the last month but the fundamental earnings outlook for these sectors is quite strong. So given the relative underperformance, I would be partial towards these two sectors as well,” he said.

“On a structural basis, our call on a global basis appears to be that investors will take money out of the US and put it into assets outside the US principally driven by impending weakness of the US dollar,” he said.

On capital goods sector, he said, “I think the government will spend less than what is being promised. I also think that the private sector is very cautious at this point, so to expect a broad-based recovery in capex – private or public – would not be a theme I would like to play on at this point. I see that many of these stocks have significantly underperformed but I don’t see the room for growth that would justify the current prices. So I would stay away from here.”

For more, watch video...

(Edited by : Santosh Nair)

First Published:Dec 1, 2020 12:15 PM IST