Vaibhav Sanghavi, director (Equities), Ambit Capital, tells Priya Kansara Pandya, that the correction in the equity markets, if it happens, won’t be more than 10 per cent. Edited excerpts:
The markets are facing resistance in scaling up further. How long will this continue?
We have witnessed range-bound movement in the Indian equity markets since the beginning of 2010, which has been in line with the trend in the global equity markets.
We think this will continue for a couple of months. The global economic data are making overseas markets a bit volatile. Hence, the Indian markets are also likely to be volatile in the short term.
People are talking about a possible correction. Do you agree?
I do not see a reason for the markets to fall steeply. Do not expect more than 10 per cent correction, if at all, because of global factors. Strong domestic factors will give a lot of support to the Indian markets, even as global markets show signs of weakness.
Which sectors, in your opinion, are likely to fall the most in the event of a correction?
Since Indian markets are currently driven by global factors, I think commodity stocks will be the first to fall. Besides these, I don’t see a major selloff in any other sector .
Do you think oil marketing companies, which have been on a roll of late, deserve further upside?
The space has witnessed a lot of interest after the government reforms on petrol pricing. They are undergoing a process of re-rating. I think these companies deserve further upsides, as they are substantially under-owned and interest on these counters is only rising.