Neelkanth Mishra of Credit Suisse feels the weakness in the Indian market is partly due to government's fiscal tightening. But on the brighter side, he believes there will be a pick up in government spending from April 1.
The weakening in the Indian markets is on the back of the earnings cut seen over the past few months. The market has seen 5 percent cut in earnings in the last three months, is the word coming in from Neelkanth Mishra, head of equity strategy, India at Credit Suisse. He believes earnings could see further cuts post the March quarter.
According to him, investors are worried about weak demand across the economy. Cement, paints and consumer discretionary sales have seen weakness, he says.
Mishra feels the weakness is also on account of government's fiscal tightening. But on the brighter side, he believes there will be a government spending pick up from April 1, due to which the economy too will see an uplift. He sees the economy reviving in April-May. "India is not in a structural slowdown," he told CNBC-TV18.
He says other economies such as Europe and Japan have started to look attractive at this point, but that won't lead to much of a waning in interest in Indian markets from FIIs. FII interest towards the Chinese market is increasing too, he adds. However, the interest for Indian equity market among institutional investors remains intact, he feels.
He is overweight on discretionary sectors such as paints, two-wheelers, NBFCs, consumer staples and private banks. However, he is underweight on PSU banks and metals.
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