Centrum Broking on Monday said scare about liquidity and asset quality of non-banking finance companies (NBFC) is a bit exaggerated.

In an interview to Nischal Maheshwari, chief executive officer, Institutional Equity & Advisory, said there are lot of short covering in the market.

ICICI Bank, short covering, stable currency and fall in crude oil is helping the market pullback, Maheshwari said, adding that global market outlook hasn’t changed as the US is still doing well and global interest rates are still a risk for our market.

Maheshwari said ICICI Bank was ripe for this kind of pullback reaction as over the last 3-4 months, most of the uncertainty was sorted out, "In the current quarter, ICICI Bank showed improvements in asset quality, topline growth etc. and most things were in place and so the pullback was seen."

Within the portfolio, he said HDFC Bank has always been there and is as equal weight now, while ICICI Bank is an overweight.

Sectorwise, Maheshwari said it would be best to stay with fast-moving consumer goods (FMCG) players like Hindustan Unilever, ITC, Asian Paints etc. as the market outlook is still hazy.

"It's a good hiding place though valuations are a bit stretched. But in this kind of market, one should be with these kind of stocks, Maheshwari said adding that the house has an equal to overweight as far as FMCG is concerned.

With regards to NBFCs, he said they are worth a bargain as most of them are down over 50 percent, "As some of the commercial papers get rolled over, lot of the negative sentiment around the sector will be done away with, but growth could still be a challenge for few quarters and would be around 15-20 percent."

On public sector undertaking (PSU) banking space, Maheshwari said they are at best avoidable, but if one still wants to take a call on them, SBI is worth considering.

From the pharma space, the house is upbeat on Sun Pharma, Dr Reddy’s and Biocon. One can look at accumulating Maruti at every fall, he added.

First Published:Oct 29, 2018 8:17 PM IST