Manish Gunwani, CIO -equity investments at Reliance Mutual Fund, spoke to CNBC-TV18 about the current trend in the equities market and macro-economic developments.

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"Although it is difficult to predict short-term move for the market but today India is on the verge of becoming stable in terms of macros again and the downside if any would stem more from global factors than domestic," said Gunwani.

Gunwani said the market currently is ignoring the positives from the domestic economy. "In a year when crude has gone up and currency has depreciated, India has managed to get a CPI number of around 4 percent. Therefore, one should not ignore the positives on the domestic side."

According to Gunwani, "the headwind for next 3-4 quarters could be that the US still seems to be best performing market and EM growth has cooled off, so US dollar will remain strong and US bond yields go up, so till then there will lot of liquidity pressure in EMs."

When asked what would be his advice to market investors, he said, "We have a neutral view between midcaps and largecaps. Although the midcaps have corrected significantly this year, 2014-2017 was a gold period for them."

The house in general prefers the bank structure over the NBFC structure, said Gunwani, adding that banks like RBL Bank would be a good candidate to become a large cap in the long-term.

Talking about the Indian debt problem, he said, "I don't see it impacting consumption and derailing the financial system. Also the chances of it being a contagion is very low."

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First Published:Oct 22, 2018 11:04 AM IST