'India remains best market among EMs; overweight consumption, IT is joker in the pack'

The 30-share BSE Sensex took only 10 trading sessions to scale 38,000 from 37,000 levels, which is one of the fastest 1,000-point rally on Dalal Street.

The index surged nearly 17 percent and the Nifty 15 percent from 2018 lows touched in March, which indicated that India is the best market among emerging markets in last 2-3 months and this is a cyclical in nature, Atul Suri, CEO and CIO, Marathon Trends – PMS said in an interview to CNBC-TV18.

MSCI Emerging Markets index is 20 percent away from its life high and look at US which is still struggling.

He has consistently believed that the market is on a firmer ground and is a sustainable bull market for next 2-3 years. "Beaten down stocks will move up now."

The current rally will extend up to 12,000 on the Nifty, he feels. "Correction is going to come but it is a part of game. Now for example, we saw 10 percent index correction in February and March but in every correction, leadership changes. So it is cyclical."

He said 10,000 or somewhere around that level is higher bottom for the market now.

Banks

Kotak Mahindra Bank and HDFC Bank led the rally in the previous month, and now ICICI Bank, SBI and Axis Bank are in the leading position.

Commercial banks, which have not participated in the rally, are seeing some catch up while which have already rallied are taking a rest, it is a cyclical, Suri said.

Even some of PSU banks are seeing big catch up.

Oil & Gas

Reliance Industries rallied 21 percent in last month against the frontline indices' more than 5 percent upside.

"The stock has been catching up after 7-8 years kind of consolidation. It was also seen in commercial banks, which had been seeing consolidation after 2010 and now all banks are picking up," Suri said, adding these are marquee names and big themes.

Consumption

Consumption is the next big theme, he believes. "These stocks were making new highs when the market was correcting. Look at their numbers which tell us the real picture. So barring private banks and financials, we are overweight on consumption."

He suggested that consumption space needs to be broaden and is not only restricted to FMCG. "Essentially look at road, vehicle sales etc, which gives me conviction and my PMS to overweight on the sector."

On commenting about Eicher Motors etc, he said in such stocks, one has to be patient. "These are long term stories and have already created wealth. One should not look at these stocks on day-to-day or month-on-month basis."

Metals and IT

At the moment, global macros are putting lot of pressure on metals and which we already seen due to trade war effect.

According to him, if US dollar (DXY) crosses 96 or so, then there would be very big upmove in US dollar and which would put pressure on metals.

But that brings another opportunity to look at IT stocks, he said. "IT sector is going to be another surprise, it is joker in the pack with stronger US dollar, though IT stocks made big gains in the last one year."

Pharma

Pharma is still in accumulation phase, Atul Suri feels. The index has gone sideways but not making any fresh lows. The Nifty Pharma index fell nearly 4 percent in 2018 but gained nearly 9 percent in the last one year.

"So investors who have patience and conviction, they can accumulate pharma stocks. In fact, it has been in a accumulation for lot of investors in the market," he said.