What Centrum Broking's Nischal Maheshwari Suggests On Investing In 2023
Maheshwari predicts that a U.S. recession will "likely hit in the third quarter of CY23 and may continue into the fourth."
Next year could witness a U.S. recession, and it's time to start looking for defensive stocks, according to Nischal Maheshwari, the CEO of institutional equities at Centrum Broking.
The chief executive officer of institutional equities at the research house said that at the moment, "markets are running ahead of their time because this kind of aggressive rate hike has historically always led to a U.S. recession."
He predicts that a U.S. recession will "most likely hit in the third quarter of 2023 and may continue into the fourth quarter."
Maheshwari added that history shows that the impact of a U.S. recession on India will also not be great news.
"History has shown that the Indian market will see a more severe pullback than U.S. markets whenever a U.S. recession hits. In the last three decades, we've seen that whenever there are aggressive rate hikes, it obviously leads to recession. Then the Federal Reserve pivots and pauses. Thereafter, given the bad outlook, the Fed starts cutting rates, and the markets tank. It has happened four times in the last three decades, and the pullback has been an average of more than 20% in the U.S. markets. Indian markets are also not unscathed."
Maheshwari suggests people should be cautious in such a market.
On his investment strategy, he said he wouldn't want to go to cash at this moment. "There's a lot of liquidity, so I want to remain fully invested." But I would start looking for defensives. I have been aggressive on banking stocks, but I'd start cutting investments in them now. I will look more into defensives like auto. It has underperformed, and there seems to be good value out there."
