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In an interview with ETMarkets, Malhotra said: “Some of the good-quality stocks are in oversold zones, as well as fundamentally sound buoyed by their strong set of recent quarterly numbers.” Edited excerpts:

A volatile week for Indian markets, but benchmark indices closed flat to positive. What led to the price action on D-Street?

Stocks have come down to very attractive levels from medium to long-term view. Despite excellent quarterly results, good quality stocks like

, , and have come down.
Some of these companies are well insulated from global uncertainty. FIIs have been selling continuously and this has caused nervousness among the retail investors.

The continuous price declines in stocks have weakened the confidence of investors, aggravated by the macro headwinds.


We are approaching the monthly expiry next week. How is the market likely to pan out and any levels that traders should watch out for on Nifty and NiftyBank?


Some of the good-quality stocks are in oversold zones, as well as fundamentally sound buoyed by their strong set of recent quarterly numbers.

Price declines have made valuations quite reasonable. I am of the camp that not much downside (max 5-7%) is left in the short to medium term for large-cap stocks.

After Friday’s bounce back do you think that we might have hit the bottom? When can bulls take over D-Street with conviction?

Very difficult to call the bottom. Bottoms or peaks are made only in hindsight. The next 6 months are going to be sideways with things looking better from 3QCY22 onwards.

Sectorally, IT stocks fell the most. What led to the price action? We saw JPMorgan downgrade as well. Should investors trim their positions (go underweight) in IT?

Little late in the cycle for a sectoral downgrade. IT sector growth drivers like cloud, digitization, AI, and machine learning are structural in nature.

Short-term swings in stock prices of IT stocks may be a good opportunity to add stocks like Infosys, and

.

Auto stocks topped sectors – what to the price action, and will the momentum continue in the coming week? Any stocks that are looking strong on charts?

Auto stocks have headwinds in the form of higher oil prices, disruption in chip supplies, and increasing interest rates. Two-wheeler stocks are attractive while CV players have shown significant improvement in numbers.

Both

and Ashok Leyland’s quarterly numbers were quite strong. EV opportunity could be big a few years down the line and one of these if not all will be a major beneficiary.

Stocks like Tata Motors have already roped in a P/E for EV opportunity and maybe looked seriously.

FIIs are on a selling spree. They have pulled out more than Rs 42000 cr from the cash segment of Indian equity markets so far in May. Time to trim positions from stocks in which FIIs hold maximum stake?


FIIs have been selling for more than 6 months. Domestic FIs and retail investors have been absorbing this. But the constant decline in prices and unabated selling, accentuated by the fall in the U.S and global markets is causing little panic in the markets.

The slight negative news is leading to huge reactions in the market, signaling little confidence in the buyers.

I am confident that India’s story is on a strong wicket and the FIIs will come back once the Ukraine crisis and other factors leading to global uncertainty subside.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)

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