Amit Jain, Chief Strategist – Global Asset Class, Ashika Group said we could see the 17600 level on the Nifty50 next week unless we have some shocking news about the war between Russia and Ukraine. Bank NIFTY may test levels of 36800 next week.

In an interview with Kshitij Anand of Zeebiz, Jain said that the banking and FMCG sector at its current level offers a great buying opportunity. Even cars can be bought once global commodity prices start to cool. Edited excerpts:

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Q) Bulls took charge of the Indian markets this week. Benchmark indices rose more than 4% in the week with a short break. What sparked the price action?

A) In our view, markets are up 4% this week due to the waning intensity of FII sales and partial short-covering. At the beginning of this week, the markets were in oversold territory, hence there was going to be a technical rebound, which is what happened.

Positive election results in favor of the BJP also bolster investor confidence in the ruling government.

Q) The Nifty50 is back above 17000. Is it the kind of level you expect for the index and NiftyBank in the coming week?

A) Yes, Nifty is now above 17000, in my opinion we may see the 17600 level next week unless we have some shocking news of the war between Russia and Ukraine. Bank NIFTY may also test levels of 36800 next week.

Q) On a sectoral basis, consumer and banking stocks predominated. What sparked the price action, but last week’s “metals” star took a beating? What sparked the price action?

A) Early in the week, both Banking and FMCG stocks were oversold, which is why we had seen a very rapid recovery in their prices.

Bank stocks recovered after a very long time as FIIs lower the intensity of their sales, on the contrary they start buying in small quantities.

The FMCG sector has performed well as the price of crude oil has cooled by 10% since last week.

Q) While India celebrates the Holi festival – what your Holi picks are for investors for a period of 9-12 months.

A) In our view, both the banking and FMCG sectors offer a low-cost buying opportunity at current levels. Even cars can be bought once global commodity prices start to cool.

Q) The US Fed took the first step in raising interest rates that market participants were taking into account. But do you think further rate hikes could impact equity markets or anticipate the worst?

A) Yes, the US Fed has started raising interest rates in line with market expectations. In our view, the FED will raise interest rates by a further 1.25% by the end of the year. This will be partly factored in by the markets from now on.

Moreover, in the near term, markets will be dominated by news of the war between Russia and Ukraine rather than Fed action.

Q) Bulls have taken control of D-Street – do you think these are appropriate levels to invest or long-term investors can wait a while?

A) In calendar year 2022 it is difficult to give a target for NIFTY as there are many geopolitical and inflation related risks.

In our view, long-term investors should buy with any dip in the banking, FMCG and automotive sectors. We may have some multi-dredging stocks in this space.

(Disclaimer: The opinions/suggestions/advice expressed here in this article are those of investment experts only. Zee Business encourages its readers to consult their investment advisors before making any financial decision.)

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