Sanjay Mookim, Strategist, Head of India-Equity Research, JPMorgan India, on Wednesday, said that the risk of a larger move in the market is higher this year. He believes that external letdowns could lead to drawdown in India. According to him, external factors could have an impact on India more than any domestic catalysts.

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He said, "I think the risk of a larger move is higher this year, whether or not, it happens we will wait and see how it goes. But my sense is that the driver of any correction if there were to be one, will be external."

“We are, hopefully, out of the pandemic, the Union Budget and the exercise around it is done and there are not too many domestic catalysts which can cause a big move in the Indian index separate from what is happening externally. The market, somehow, has ignored the USD 95 per bbl oil print for now, but should that continue to rise, it becomes another headwind to equities in India,” he added.

According to him, the early part of the rate cycle aids banks in terms of net interest margin (NIM) and profitability. He explained that high interest rates could impact the new-age business stocks in the short term as well.

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“In our portfolio, we do not have any of these (new-age business stocks) because if we are firmly in a rising rate environment, these stocks will struggle to move in the short-term,” Mookim said.

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On sectors, he mentioned that he is overweight on banks and autos. In fact, he is of the view that there are chances of significant upside in volumes for the auto sector. Mookim added that IT could see tailwinds on account of rupee depreciation. He believes the sector saw significant re-rating.

Watch the video for the full interview.

First Published:Feb 9, 2022 12:36 PM IST