Phani Sekhar, fund manager, Angel Broking, spoke to Jinsy Mathew on midcaps and smallcaps, Indian markets versus Asian peers and outlook on foreign inflows into the country. Edited excerpts:
How long do you expect the volatility to continue? Do you expect the markets to surpass the all-time highs anytime soon?
The volatility will continue till the first week of January 2011. However, after that there is a likely situation where the markets will move to new highs.
Do you think it is a good time to start investing in midcaps, given the recent correction? Any sectors themes you suggest?
Yes, it’s a good time to invest in midcaps given the recent correction. Infrastructure and information technology (IT) midcaps are the attractive sectors to look out for.
What is your outlook on the banking sector that has been underperforming the frontline indices?
I am positive on this space. It may be currently underperforming but in the coming days as the markets situation improves, I see this sector as a market performer.
Given the global economic condition, how do you see India as an investment destination compared to Asian peers?
India will continue to remain as an attractive investment destination among all the Asian peers, but we can’t expect the market to be immune to global tremors.
The BSE Auto was one of the biggest gainers in 2010. But now the sector is underperforming. Are we done with the rally?
No, I believe the good times will continue. But surely, the initial spurt is over. The index will perform 20 per cent- 25 per cent better than the market in the coming days. However, it won’t be like the good times (i.e. 40 per cent - 45 per cent rise) that we saw during the last year.
What is your outlook on foreign inflows for 2011?
The foreign flows for the coming year will be more that the current year. The flows will increase as stated earlier, as India continues to be an attractive destination for investors.