Market Veteran Sees Global Cues Driving Short-Term Rally With Eye On Next Budget
The key catalyst and deciding factor for Indian markets in the long term will be the post-election budget, and avoiding SMID space would be wrong as there are some great companies, he said.
Due to lack of recent local triggers, the Indian market may experience a short-term rally taking cues from global news, according to market veteran, Andrew Holland. He elaborated that the next big local trigger for the markets will be the Union Budget by the next government.
"In the meantime, we might have some rallies that will be more globally led than if they were locally led," Holland, the chief executive officer of Avendus Capital Public Markets Alternate Strategies LLP, told NDTV Profit.
The near-term cues will come from the various central bank rate decisions, with the expectation of rate cuts from the Japanese central bank.
"The key catalyst and deciding factor for Indian markets in the long term will be the post-election budget, according to Holland. "I think we know the story of India. The government is going to spend on defence, railways, infrastructure... That will play out over the next two to three years."
The market is also looking at the manifestos of political parties and what they state on new development plans. "There is no new news to come in our markets, and we could probably say that a lot of the pre-election rally happened in the last year after the state elections."
"We have been rebalancing some of the public sector undertakings and moving towards more private banks," Holland said. "The run-up is not just in banking but of PSUs in general, and the value is more in the private banks."
The market has seen the mid and small caps stocks correct in the past week but avoiding them won't be prudent as there are some good companies in the SMID space, Holland said.
