Volatility in Indian markets may continue in first half of 2023, says WhiteOak Capitals CEO - Banks, AMCs, IT sectors in focus
With higher credit offtake and better capital expenditure, Sommaiyaa believes the banking sector - private and PSU lenders - should continue to outperform on the improved conditions.
The volatility in the domestic markets is likely to continue in the first half of 2023, WhiteOak Capital, Chief Executive Officer (CEO), Aashish P Sommaiyaa said while speaking to Zee Business Managing Editor Anil Singhvi in an exclusive interview on Monday.
In his outlook for the next year, the market analyst Sommaiyaa was of the view, “The markets for the first 3-6 months of 2023 may show volatility and the second half of the coming year will be better than the full year of 2022.”
Market Outlook
According to the market expert Sommaiyaa, “More rate hikes in US and India are possible in the coming months due to which the volatility in the market may continue. Similarly, the street has cut Nifty EPS by 5-7 per cent after a rejig in sectors.”
He added that the margins pressure is behind us, and further improvement is possible, while the current economic situation and corporate earnings performance shall sustain the growth momentum.
Sectors To Watch Out
With higher credit offtake and better capital expenditure, Sommaiyaa believes the banking sector – private and PSU lenders – should continue to outperform on the improved conditions. Similarly, Asset Management Companies (AMCs), are also likely to show improvement in 2023, he added.
According to the analyst, there has been no change in prices for a long time now in Mutual Fund firms and despite not-so-positive consensus, this sector is getting attractive.
Besides, the IT sector shall also continue to perform better, they get impacted by global headwinds, however, the overall trend doesn’t get broken by global negatives, Sommaiyaa added, stating that even Consumer Discretionary space shall also do better in the coming year.
DII Flows
The flows in the market may decline in 2023 on the back of three negative factors such as 1) benchmark indices are trading near life high levels, 2) heavy sectoral rotation and 3) underperformance of broader markets such as mid and small cap, as per Sommaiyaa.
He said, when the market makes a new high after a steep fall, some investors try to withdraw. He added, frontline indices were narrow in the first 6-7 months of 2022 and now it has improved trading near-life highs levels. Sensex and Nifty50 reported a gain of around 5 per cent year-to-date as of today.
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