If global events don't play spoilsport, we can see a broader rally in the market, said S Krishna Kumar, Chief Investment Office, Equity at Sundaram Mutual Fund.

In an interview to CNBC-TV18, Kumar said valuations are currently fairly balanced and compelling for a broader move in the market.

According to Kumar, "Midcaps and smallcaps last year had a stupendous run and the largecap space is now picking up steam given the differential valuations that exits."

Kumar said in the last 6-8 months, the largecaps are up 6-7 percent, while the mid and small caps are down 12-20 percent.

Talking on midcap basket, he was bullish on that space and automotive segment looked interested for him.

However, stocks that are linked to automotive value chain, like commercial vehicles, passenger cars, auto ancillaries etc. looked good for the next two years, he said.

Kumar said the valuations for building material and consumer durables sector have corrected and the space could be back to good valuations.

The house is neutral on the midcap information technology (IT) space, but think the bottom is in place for the pharma space in terms of stock price and valuations. So, the healthcare space should get back into interesting times, he said.

He is also very upbeat on the services sector as every developing economy benefits from this sector as the trade moves from unorganised to organised services. Therefore, spaces from retail, entertainment, hospitality and healthcare will benefit going forward.

With regards to mutual funds, he said the flows have been fairly good and they are not seeing too much redemption pressure.

First Published:Jul 12, 2018 12:29 PM IST