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A pedestrian wearing a face covering walks under power cables near the Bombay Stock Exchange (BSE) building stands in the background in Mumbai. (Bloomberg)
A pedestrian wearing a face covering walks under power cables near the Bombay Stock Exchange (BSE) building stands in the background in Mumbai. (Bloomberg)

Markets may sustain rally

  • Sectors such as real estate, technology are among the best bets, the investors said at Mint’s Pivot or Perish series panel discussion
  • Experts expect global liquidity flow into equities to continue for some more time, and India will be a beneficiary of that

Despite the widespread economic disruptions because of the pandemic, Indian markets are now nearly back to pre-covid levels. While the pandemic remains a major headwind, top investors speaking in a Mint panel on capital markets said they believe the stocks rally will continue.

Sectors such as real estate, technology are among the best bets, the investors said at Mint’s Pivot or Perish series panel discussion on Thursday.

“Covid has fast-tracked transition to the organized sector. Good businesses will sustain as their operating efficiencies have gone up. As long as interest rates are subdued, any valuation in the markets is justified," said Kalpen Parekh, president, DSP Investment Managers. The big themes for investors, he said, will be personal mobility, health and hygiene, insurance and consumer durables.

Experts expect global liquidity flow into equities to continue for some more time, and India will be a beneficiary of that.

If a vaccine is developed soon, then the next growth cycle is likely to be in Asia, led by China, said Andrew Holland, chief executive of Avendus Capital Alternate Strategies.

“That is going to bring a lot of foreign flows into Asia, and India’s weightage in that is going to be high," he said.

So far this year, foreign portfolio investors have pumped in $5.75 billion into Indian equities, with $1.71 billion inflows in October alone. Domestic institutional investors are net buyers of shares worth 55,728.83 crore in 2020. They, however, sold stocks worth 12,235.9 crore this month.

Holland said real estate is one sector he will watch closely in the next fiscal.

“The yield of real estate may go up to 3%, and for which you will get a real asset. The whole game is changing. Pharma is another sector. If a big MNC comes up with a vaccine for a market like India, I envisage a rise in mergers and acquisition in this sector," he said.

Krishna Kumar Karwa, managing director of Emkay Global Financial Services, said real estate may emerge out of 7-8 years of stagnation as tremendous growth is expected with supply reducing even as demand is picking up.

Nischal Maheshwari, chief executive of institutional equities at Centrum Broking, is betting on technology and e-commerce firms in FY22.

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