Mahesh Patil, Co-Chief Investment Officer, AB Sun Life AMC is of the view that one may not see a large correction for the market on account of global concerns because the market fundamentals are improving.

Although the rupee has been weakening, the markets has done well, so a mild correction is possible, he said in an interview with CNBC-TV18.

When asked which sectors would be impacted due to rupee depreciation and rising interest rates, he said some financials and NBFCs could see mild weakness due to surge in bond yields.

According to him, rupee depreciation could be a bit of catch up thing because earlier when other emerging market currencies were depreciating rupee was resilient. Moreover, crude prices are also rising.

“If interest rates go up, the fixed income side would also see some losses but looking at market and valuation at this point in time and where interest rates are it is advisable to rebalance the portfolio, some allocation towards that over a longer terms period is advisable,” said Patil.

Sector wise, he said the commercial vehicle sector is likely to report 10-15 percent growth this year. For two-wheelers the volume growth was good on back of rural demand but pressure on margins could remain because of high competition and need to gain back market share.

However, for the passenger car segment, margins are unlikely to be impacted because the volume growth should be good, he said.

With regards to correction seen in the FMCG space, he said earnings and outlook for the space still remain robust but maybe valuations were a bit stretched. In a rising interest rate environment, the cost of equity also goes up, so some de-rating could be happening for the space, he added.

However, overall the structural story is still intact for FMCG companies. One could look at buying some good quality companies on slightly more correction of 10-15 percent.