We are seeing deeper cuts in broader markets, but the benchmarks are trying to hold on to the positions and important levels though, if 24,800 is a level we still need to see. What is your view on the market all over?
Rohit Srivastava: We are seeing a knee-jerk reaction to the news flow. The markets were already down for most of July on the expectation that things could turn sour to some extent or the uncertainty about what is really going to come out of this. Now that we have gone from uncertainty to some level of certainty and the worst-case scenario has been discounted. Most of the key indices like the Nifty or the midcap have tested the 17th June low from where the up move had really taken off and that low is acting as a good support.
So, I do not think we will fall below 24,600. We should slowly start to develop an upward trend from here and see the market slowly advance to higher levels. That is what I would think will happen as more clarity comes in the next two days also. But for the day, it is going to just end in a knee-jerk reaction. Overall, the impact of all of this has already been fairly discussed to the extent that it is going to be very specific to stocks that have an excessive exposure to the US. Apart from that, the markets will continue to focus on domestic linked stories more than anything else and that is where the gains will eventually come from.
The FMCG sector is the only index that has been spared from the turmoil that we are seeing in the global market. Many of these domestically linked sectors have not been impacted in today’s downtick. Your view on the entire FMCG space as a whole and that perhaps the uptrend is likely to continue going forward especially the outperformance as compared to other globally exposed sectors?
Rohit Srivastava: FMCG is turning out to be the only defensive play because even you would be scared about what happens to pharma in terms of the actions. Trump has already mentioned it a couple of times and the other defensive sector used to be IT where again nothing has really been said on services, but a lot of negative remarks were there a week or so ago in terms of US companies outsourcing too much. So, we do not know how the entire game plays out.
I think that only leaves FMCG as a defence whenever there is a tougher market. Some money gets allocated to the FMCG sector. But eventually there is a lot of growth in individual mid and smallcaps that are domestically focused and those sectors will attract attention and drive the next move up from here. And even if you look at places like metals for example, it is a domestically focused segment, especially steel. Even when global steel prices have been down to flat for several months, we have seen steel take off much better. That is the kind of thing we are seeing and it will help our markets do well over time.
I believe consumption is the only sector which is fed completely and at the same time domestic plays are something which we need to watch out for. However, textiles sector is feeling the heat at present.