NEW DELHI: The shift of real estate money into equity has made valuations expensive for
stocks, said
Saurabh Mukherjea, founder of
Marcellus Investment Managers.
Addressing the
Morningstar conference in Mumbai today, Mukherjea said the market had lost sanity in the last few months and the ongoing pullback is bringing it back to the market.
On Tuesday, benchmark indices declined for the fourth consecutive day. The BSE Sensex dropped 287 points to 33,847.23, off 13 per cent from its all-time high of 38,989.65. The Nifty, on the other hand, slipped below the 10,150-mark, the lowest in nearly seven months.
Mukherjea believes that the ongoing correction is only halfway through and believes there is more to go, given the challenging macro landscape. In an interview to ETNow last week, the expert had said the fair market value for the domestic market was another 10-15 per cent away.
Mukherjea, who is known for predicting the global financial crisis of 2008 at least a year ahead, said the market is getting cheaper and one may put their investible money to work.
Interest rates, exchange rate and GDP are three factors, according to Mukherjea, that drive 60 per cent of Indian market. Politicians and elections are not market drivers, he observed.
Stocks from FMCG, IT and pharma sectors have very little correlation with the domestic macro environment, he stressed.
The market maven said most largecap fund universe will become tracker funds rather than being so-called actively-managed funds after Sebi’s TER (total expense ratio) rule.