Indian markets gained significantly in the last quarter of CY2020 which is a good sign for a decent 2021, believes Shankar Sharma, VC & Joint MD of First Global.

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Indian market rose around 14-15 percent in 2020 and almost all the gains came in October to December period.

“In the year 2020, especially in the last quarter, India has started to show signs of life and that is a very good sign. I think that augurs well for this year. India is cyclically due for a good year in 2021, Sharma said in a conversation to CNBC-TV18.

After a 10-year bull market, 2020 saw a bit of cyclical bear market in the US dollar, he noted. Sharma is of the view that now investors should move away from dollar-denominated stocks due to the greenback’s depreciation.

“You need to be getting into assets and trades which are not just us dollar-denominated so you need to have diversification outside of pure US dollar plays and that is one of the reasons why in our global funds we moved away from US equities in large part from the middle of the year into other non-US equities and that has helped us a lot.”

On sectoral bets, he said, “Again from a tactical perspective, we are playing the cyclical so we had a very good run on the metal plays. In India, we really have limited choice we are placed in Tata Steel, and Hindalco and all that. We have played cement as well. We have not played the banks. So you can play cyclical without taking excessive risk and we are playing that without taking a lot of leverage or leverage plays.”

On IPO Sharma said, “Just because two or three IPOs got massive subscriptions and great listings mean that it an end of a bull market, it is a sign of caution no doubt about it. I don’t think it marks the end to the current bull market because India has not had a bull market. I don’t think you have had a speculative frenzy on a stock market side anyway, I think it is building up and it can go on a lot longer before things go south.”

Watch this interview for more.

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(Edited by : Ankit Gohel)

First Published:Jan 1, 2021 1:36 PM IST