Andrew Holland, CEO of Avendus Capital Alternate Strategies, spoke to CNBC-TV18 about the chances of Indian stocks witnessing a pre-election rally and the simmering border tensions.
According to Holland, “There is a possibility that we could see a pre-election rally because liquidity and market sentiment is on the upside at the moment. Globally, too the US-China trade deal could give the markets a pop higher and even if we were to see weakness in the economy, it would just mean lower interest or stimulus.”
“Locally, after the border tensions, there is a feeling that it could have added more seats for the BJP and they could get a majority. All this could lead to a pre-election rally. Moreover, with our GDP likely to be around 6 percent, there could room for easing by the RBI in next policy, even to the tune of 50 basis points,” said Holland.
“The beaten down stocks seem to be having their day in the Sun but all the issues plaguing the midcaps haven’t really ebbed and fundamentals do not justify the up move in them. So would still prefer to look at good quality individual stocks,” he said.
The house is upbeat on the IT sector and expects the dollar to continue to strengthen in the next three to four months.