The earnings growth may not be of help for the market too. It will not be a surprise if despite earnings growth after several quarters, the market does not react to it, Pramod Gubbi said.
US President Donald Trump’s announcement to impose import tariffs on steel and aluminium in the US sparked fears of trade war with China and Europe.
Reacting to the development, metal stocks in India reacted negatively to the news, with the Nifty Metal index falling over 2 percent. Steel and aluminium stocks, in particular, fell up to 2.5 percent.
Experts believe that it may not be a good move for global markets. “I think it is not going to be good for anyone. The whole idea of globalization resulted in reduced costs globally. If you are reversing that process, all benefits will have to be reversed,” Pramod Gubbi of Ambit Capital told CNBC-TV18 in an interview. He highlighted how S&P 500 had fallen over 20 percent the last time US government imposed import tariffs.
Going forward, Gubbi expects the market to be driven by global flows. Having said that, he also expects domestic-facing sectors to perform better. Among them, consumption theme will stand out in this year along with some private banks. “(Private) banks with strong CASA and with ability to keep a hold on cost of funding will do well,” he told the channel.
The earnings growth may not be of help for the market too. It will not be a surprise if despite earnings growth after several quarters, the market does not react to it.
Speaking on IT space, he believes that a global IT spend pick up is visible. “Having said that, real thing hurting was the disruption in consumption pattern and adjustments have to be made in that sense for these firms,” he added. Overall, he expects BFSI spends on IT to go up.
