Daily Voice | This investment manager has 3 sectors on his radar if there is a sharp correction

Amit Jain, who co-founded Ashika Global Family Office Services, hasn’t ruled out a deep correction if Israel retaliates against Iran following the recent drone and missile attack.

The jitters will not only be felt in India but markets across the globe, at least in the short term, Jain, who has 18 years of experience in the Indian banking and financial services industry, said.

And he has a plan in place for such an event. If there is a global correction, "I would deploy 20 percent money in Hong-Kong Tech Sector’s listed ETF on National Stock Exchange and the rest 80 percent into Indian banking, FMCG and speciality chemical themes," he told Moneycontrol in an interview. Edited excerpts

Can the Iran-Israel conflict trigger a bigger correction in the market in the short term?

Last weekend, Iran attacked Israel with more than 300 missiles, which was one of the largest strikes by Iran on Israel in last 40 years. This is a matter of serious concern, as knowing Israel, there are very high chances that within the next 10 days, Israel will strike back on Iran with double the force.

Though the US and the G-7 nations are advising Israel to avert this attack as there was hardly any casualties by Iran’s attack, if this attack happens then it may give jitters not just to the Indian stock market but to global markets at least in the short term.

Also read: Aiming $5 bn in India bets this year in IT, pharma, financials: EQT Asia's Jean Salata

Where will you put your money if there is a major fall in the market?

If in the short-term there is a correction in the global stock market, I will deploy 20 percent of the money in Hong Kong tech sector’s listed ETF on the National Stock Exchange and the rest 80 percent into Indian banking, FMCG and speciality chemical themes.

Within the banking sector, I will further bifurcate 60 percent in private sector banks and 40 percent in public sector units banks. In FMCG, I will prefer Hindustan Unilever at Rs 2,200 and Dabur at Rs 490 from a medium-to -long-term perspective.

Are you bullish on the telecom space?

The Indian telecom sector is currently experiencing growth due to the rollout of 5G technology and increasing demand for high-speed internet connectivity. The major players in this sector are investing in infrastructural needs to drive industry growth.

Also read: IMF raises India’s FY25 GDP growth forecast by 30 bps to 6.8%

From a sector point of view, I am bullish, however, from a stock market perspective, these companies are fairly valued at current prices.

Which sectors are you watching the most in this earnings season?

I am keenly focusing on the earnings growth of IT, speciality chemical, FMCG and banking sectors. Even within IT and banking sectors, I am keen to watch the growth of midcap IT companies and midcap banks. In my personal view, these two sectors can have next multibaggers stocks from medium to long-term perspective.

The FMCG sector may be a dark horse for the next one year as the monsoon predictions have come out very favourable. Also in the election year, there is a lot of money deployed by the political parties in rural and semi-rural areas, which will create an inherent demand in the FMCG sector.

Will the IT sector will start looking attractive this financial year?

The Indian IT sector has strong fundamentals and is expected to sustain the pace of flows into Indian equities. The exact quantum of money flowing into the Indian IT sector will depend on the pace and quantum of interest rate cuts in the US.

I am keenly watching the guidance Infosys will give on Thursday (April 18), which will decide the path of IT sectors. After 15 percent decline from its peak, Infosys looks good at the current level of Rs 1,400.

Is a fed funds rate cut possible before September?

In the beginning of CY 2024, many stock market analysts were expecting a minimum of three to four rate cuts. However, with the latest US inflation numbers, it looks like the US Fed may cut the rate of interest in two tranches of 25 points each, instead of four predicted earlier. There are very high chances that one tranche of rate cut will be done before the US elections i.e. before October.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.