Manish Sonthalia, head equities-PMS at Motilal Oswal AMC, is of the view that the sentiment around the world is negative on equities, so one is likely to see further downside but this makes an ideal case for buying rather than selling.

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“Currently, the environment is that everybody is negative. You have zero volatility, perfect macros, calm markets and perfect valuations- all things don’t happen together. I would believe you could see some more downside but clearly valuations given the growth that we are looking at for FY19 and FY20 makes a case for buying rather than selling,” Sonthalia said on Tuesday.

With regards to the auto space, he said, "The entire space worldwide is not doing well and there could one more quarter of pain for them. Later on demand may pick up on back of a long wedding season in 2019. Valuations too have corrected and are now come into value zone. We are close to the bottom in most of the auto names."

"The auto ancillary stocks are likely to fall less than the auto original equipment manufacturers (OEMs)".

Talking about the bright spot from the earnings season, Sonthalia said, "Consumer discretionary saw good profit and volume growth. We are seeing transition from unorganised to organised players and so consumption is a theme to watch out for."

With regards to Sun pharma, he said, "leaving aside the corporate governance issues, purely from business standpoint it offers immense value. See fundamental value in Zee Entertainment and one could see re-rating once pledge issues are settled."

First Published:Jan 29, 2019 10:42 AM IST