Home / Business and Economy / Market Bottom Near? Expert Sees Relief Ahead
Market Bottom Near? Expert Sees Relief Ahead
24 Sep
Summary
- Market selloff may be nearing a bottom, with some factors already priced in.
- Second-quarter earnings are expected to be a key market catalyst.
- Healthy balance sheets offer long-term optimism despite current pressures.
Sanjay Parekh, Founder & CIO of Sohum Asset Managers, suggests the current market selloff is potentially nearing its bottom. He acknowledges pressures from high crude oil prices, rising US bond yields, foreign investor selling, and regulatory uncertainties. However, Parekh points to robust household, corporate, and banking balance sheets as reasons for long-term optimism.
He anticipates that second-quarter earnings will serve as a crucial trigger for the market. Following a strong first quarter with Nifty earnings growth of approximately 17-18%, he expects the earnings trajectory to remain healthy. Parekh also noted that mid- and small-cap companies showed better performance in the first quarter.
Sustained high crude oil prices pose a risk to both corporate and government balance sheets. A decrease in crude prices, coupled with stabilized US yields, could significantly relieve market pressures. Sohum Asset Managers plans to focus on market leaders with strong balance sheets and reasonable valuations.
The firm is strategically investing in companies like Maruti Suzuki, Reliance Industries, Sun Pharma, and major private banks. Some metal companies have also offered a hedge against geopolitical risks due to strong commodity prices. The investment strategy prioritizes bottom-up stock selection, primarily focusing on large-cap companies.
