Latest news with #SonamSrivastava
Mint
5 hours ago
- Business
- Mint
RBI's surprise 50 bps rate cut lifts markets, Sensex soars over 500 points, Nifty above 24,900
Indian benchmark indices Sensex and Nifty ended higher on June 6, reversing early losses after the Reserve Bank of India (RBI) surprised markets with a larger-than-expected 50 basis points repo rate cut in its June monetary policy review. The RBI-led Monetary Policy Committee (MPC), under Governor Sanjay Malhotra, also shifted the policy stance from 'Accommodative' to 'Neutral', a move that sparked optimism across sectors and lifted investor sentiment. The benchmark Sensex climbed 534 points to its intra-day high of 81,975.79, while the Nifty added 175 points to its day's high of 24,925.95. The positive momentum extended to the broader markets as well, with the Nifty Midcap index rising 0.5 percent and the Nifty Smallcap index advancing 0.4 percent. Meanwhile, the India VIX declined another 2 percent, indicating reduced volatility expectations. According to Sonam Srivastava, Founder and Fund Manager at Wright Research PMS, the unexpected 50 basis point rate cut highlights the RBI's growing focus on stimulating economic growth amidst moderating inflation and global monetary easing. 'With real rates still elevated and domestic demand showing uneven trends, this move is intended to unlock credit growth, revive private sector investment, and ease repayment burdens for borrowers,' she said. Srivastava also noted that key sectors such as housing, auto, banking, and infrastructure are likely to benefit as transmission picks up pace. She added, 'The move improves the medium-term outlook for consumption and capital expenditure. Bond markets, especially in the long-duration segment, are expected to rally, setting the stage for a more accommodative environment going into the second half of the year.' In a further signal of confidence, the central bank revised its CPI inflation forecast for FY26 downward to 3.70 percent from 4 percent, while retaining the GDP growth projection at 6.5 percent. The dovish policy tone triggered strong buying in rate-sensitive sectors. The Nifty Realty index surged nearly 3 percent, becoming the top-performing sector, as investors cheered the supportive outlook for housing demand and affordability. The Nifty Auto, Nifty Bank and Nifty Financial Services indices rose by over 1 percent each. Other gainers included the Nifty Metal index, up 0.9 percent, and the Nifty Oil and Gas index, which added 0.4 percent. However, defensive sectors like Nifty IT and Nifty Pharma closed in the red as investors rotated into cyclical and growth-oriented plays. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, offered a nuanced take on the development. 'While the 50 basis point rate cut is growth-positive, it could be marginally negative for the markets in the near-term. This move appears to front-load the rate easing cycle, and the shift in stance to 'Neutral' signals that further cuts may not come soon unless conditions change dramatically,' he said. He added that bank margins could face short-term pressure due to the aggressive cut, though any weakness may be offset by the pick-up in credit demand and improved loan growth over time. The RBI's bold and unexpected rate cut delivered a clear message of pro-growth intent, reinforcing confidence in India's monetary policy trajectory. While the move triggered gains across equities, especially in interest rate-sensitive sectors, analysts remain watchful of the evolving credit environment and transmission trends. With inflation expectations cooling and global easing cycles underway, the RBI's pivot could support a broad-based recovery, even as markets weigh the near-term implications for banking margins and liquidity. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Economic Times
a day ago
- Business
- Economic Times
Stay put if you already have defence & railways stocks but avoid fresh investments: Dipan Mehta
Dipan Mehta, Director, Elixir Equities, says defence sector earnings have been strong, attracting investors and momentum trading, but valuations appear stretched with potential execution challenges. While railway stocks are rising in sympathy, government expenditure remains stable, and some companies have reported disappointing results. Existing investors may hold, but fresh investments in both sectors are not recommended due to valuation concerns. ADVERTISEMENT I want your view on the overall market yes, of course, but select packs in the market are once again gaining some steam like railways and defence. These are themes that had seen a runup, then cooled off for a bit and they have started spiking again today. Do you believe this is the beginning of another leg of spikes or do you believe it was just a one-off? Dipan Mehta: It is a continuation of the momentum which we have seen in these companies over the past few weeks or so. If you analyse the entire earning season, the best sector has been defence, not as much railways, but defence certainly has come out with flying colours and that is why investors are getting focused over there and a lot of momentum trading is also taking place over there and a lot of retail traders have entered these counters, I think the valuations are a bit stretched at this point of time. No doubt the sector had a great quarter this time, but there are always execution challenges and if you go back into history, there is a lot of lumpiness in their earnings which is not completely discounted in the valuation ratios. So, if you are invested in defence, I would say remain invested but from a fresh investment perspective to me, it is an avoid. Pick undervalued, high-quality stocks: Sonam Srivastava's 2025 playbook I am not sure about Railways. They are going up in sympathy with the defence hoping that government expenditure will pick up over there. We do not know that for sure because in the last three years, railway expenditure in the Budget has been pretty much stable at around Rs 2.5 lakh crore or so and over there also, despite a steep 30-50% correction in railway stocks, they are still quite expensive and some of the bigger ones like Titagarh Wagons came with a very disappointing set of numbers as well. I would avoid both sectors from a fresh investment perspective. But there is great long-term visibility and if you are an investor with a long-term view, you may remain invested. The big wave or the fad in the market right now is promoter exits and that too at steep discounts in some cases amid the rich valuations. There are many block deals on a daily basis and some even FII and DII driven. What is that smacking off and should one now warrant caution in the markets? Is it smacking of peak valuations by any chance? Dipan Mehta: We have seen this play out in the past also in the early half of 2024 right up to September 24 and we saw a correction after that. So, the minute the market starts to do well and valuations get steep, we are seeing promoter selling and we are seeing private equity selling and that all has been absorbed by retail investors either directly or through mutual funds. ADVERTISEMENT It has not reached the peaks which we saw in 2024, but certainly the trend is getting more and more accentuated. So, yes, it is a signal that markets are at the expensive zone and in my opinion, there are less uncertainties now than a few months ago with the exception of Trump and we do have a supportive Reserve Bank and a lot of favourable macro factors as well. In this earning season one thing is very clear that it has been very selective.I suspect the next few months will be very selective for the markets as well and wherever there are pockets of overvaluation, we will continue to see supply and this is going to be a very challenging time for the investors and not like what we saw last three-four years up to September '24 where entire market rallied. The entire trend is going to get very narrow and it is going to be a bit difficult to charter for the novice investors. ADVERTISEMENT (You can now subscribe to our ETMarkets WhatsApp channel)
Economic Times
3 days ago
- Business
- Economic Times
Pick undervalued, high-quality stocks: Sonam Srivastava's 2025 playbook
In this exclusive conversation, Sonam Srivastava, Founder of Wright Research, shares her market outlook, sectoral bets, and strategy for investors navigating today's volatility. From cautious optimism to tactical sector allocations, Sonam outlines how to approach equities in 2025 — and why this could be the right time to start building quality positions. Excerpts: ADVERTISEMENT Q. Let's begin with the market sentiment. The stock markets have been quite volatile lately. What's your current view on the market? Sonam Srivastava: The 25,000 mark has become a psychological barrier. We are cautiously optimistic at this point. The market has underlying strength, particularly in small- and mid-cap stocks that have reported strong earnings recently. In such a volatile environment, the focus should be on high-quality and trending stocks, while keeping an eye on global developments. Q. Q4 results have been muted, with Nifty 50 earnings growing less than 6% YoY—below street expectations. What's your take on this? Sonam: I actually find this quarter slightly encouraging. In previous quarters, downgrades outweighed upgrades. This time, we're seeing more upgrades, which is a positive sign. Especially in the broader market, some standout results indicate we could be at a turning point in earnings growth. Q. Are global factors playing a bigger role in impacting Indian markets currently, or is it more of a domestic story? Sonam: It's a mix of both, but global factors are very influential. For instance, US regulatory changes have pressured pharma stocks. Rising yields in the US and no rate cuts by the Fed are affecting investor confidence globally. However, domestically, we have strong positives—RBI is injecting liquidity, inflation is cooling, consumer confidence is picking up, and we might even see accelerated rate cuts. So, companies with a domestic focus may be better positioned right now. Q. Which sectors look promising for the next quarter or near term? What should be the portfolio strategy? Sonam: Sectors with strong domestic drivers like industrials, capital goods, and consumption are showing strength. The FMCG sector could benefit from a good monsoon. We also see momentum in defence, railways, and private banking. Allocating across these sectors with a focus on quality makes sense right now. ADVERTISEMENT Q. Should investors go all-in at this stage or adopt a more staggered approach? Sonam: Given the resilience in the market and the ongoing global uncertainties, it's best to take a balanced approach. Start building positions in high-quality stocks, especially those currently undervalued. Holding some cash or investing in multi-asset funds or gold can provide a cushion. But yes, it's a good time to gradually build equity exposure. ADVERTISEMENT Q. Are there any sectors that may underperform in the near term? How should investors hedge against them? Sonam: IT could remain weak due to muted earnings and unattractive valuations, driven by weak global demand. Certain PSU segments also appear overvalued—investors should be cautious there. Diversification across sectors remains the best hedge against such risks. Q. For 2025, are there sectors where retail investors should be overweight? ADVERTISEMENT Sonam: Yes, industrials, consumer durables, private banks, and agrochemicals—especially with a strong monsoon—look promising. Defence and railways also have tailwinds. Investors can consider overweighting these sectors while maintaining a diversified approach. Q. Could you name some specific stocks from these sectors that look strong both fundamentally and technically? Sonam: In capital goods, L&T is a solid pick. For defence, BEL and HAL look attractive. In agrochemicals, Coromandel and Avanti Feeds stand out. Among private banks, ICICI Bank and Kotak Mahindra Bank are good options currently. ADVERTISEMENT Q. So would you say this is a "buy on dips" kind of market? Sonam: Absolutely. This is a great time to accumulate quality stocks at attractive valuations. If you've been eyeing certain stocks, now might be a good opportunity. Q. What is the near-term market outlook? Sonam: We may see some consolidation around 25,000 on the Nifty in the short term due to global pressures. But the broader market—especially small and midcaps—looks very promising with solid earnings and growth prospects. It's a good time to start building positions for the long term. Q. For someone entering the markets for the first time right now, what's your advice? Sonam: Start with a diversified portfolio. A core-satellite approach works well—use large and midcap funds or multi-asset strategies for your core, and build a satellite allocation in high-potential sectors like defence, FMCG, or chemicals. That way, you're protected while still capturing opportunities. Disclaimer: Recommendations, suggestions, views and opinions given by the experts/brokerages do not represent the views of Economic Times. (You can now subscribe to our ETMarkets WhatsApp channel)
News18
22-05-2025
- Business
- News18
Tech Mahindra, Infosys Lead IT Selloff Amid Rising US Fiscal Deficit Concerns
Last Updated: So far in 2025, Nifty IT stocks have declined up to 34%, with names like Oracle, Wipro, Infosys, Coforge, TCS; What should Investors Do? IT Stocks Tumble: Shares of Indian IT companies declined sharply on May 22, mirroring the sell-off in US tech stocks, as investors grew increasingly concerned about the possibility of a widening US federal deficit. The Nifty IT index slipped nearly 1.4% in early trade, making it one of the worst-performing sectors of the day. The pressure stems from renewed worries around US fiscal health, with Republican lawmakers working on a new budget proposal that includes tax cuts. However, the potential for this proposal to significantly expand the already large federal deficit has rattled markets. The mood soured further after Moody's downgraded US sovereign debt last week, citing mounting debt levels and fiscal imbalances. These developments have pushed long-term US Treasury yields higher, sparking a sell-off across global equity markets. US indices tumbled overnight, with losses spilling into Asia as Japan's Nikkei 225, South Korea's Kospi and Kosdaq, and Hong Kong's Hang Seng each fell more than 1% in morning trade. Back home, benchmark indices opened in the red, with IT stocks bearing the brunt of the fall. Given their heavy reliance on US business, Indian IT companies are seen as vulnerable to a prolonged period of US fiscal instability. Tech Mahindra led the losses, plunging over 2% to Rs 1,564.70. Persistent Systems, HCL Tech, and Mphasis also dropped more than 2% each. Market heavyweights TCS and Infosys slipped around 1.4%, while Wipro declined over 1%. LTI Mindtree, and Coforge traded with marginal losses. The IT sector has faced increased volatility this year, initially rallying but reversing gains after the Moody's downgrade. Analysts have flagged high valuations and persistent earnings downgrades as major concerns heading into FY26. 'This is not a broad-based 'buy-the-sector' moment," said Sonam Srivastava, founder and fund manager at Wright Research. 'While the sector has underperformed, valuations are not uniformly cheap yet, and earnings downgrades are still trickling in. Patience will be key." So far in 2025, individual Nifty IT stocks have declined between 7.6% and 34%, with names like Oracle Financial Services, Wipro, Infosys, Coforge, TCS, and HCL Tech dragging the index down by 14%. In contrast, the Nifty50 has gained 4.4% in the same period. From a valuation standpoint, the Nifty IT index is currently trading at a P/E of 29.1x, close to its five-year average of 29.3x. Some stocks, however, are trading at elevated multiples—Coforge at 67.5x (vs. 44.3x average), HCL Tech at 25.8x (vs. 22.7x), and Tech Mahindra at 36.7x (vs. 28.5x), according to Bloomberg data. Should You Buy IT Stocks Now? While near-term headwinds persist, analysts remain structurally positive on the Indian IT sector due to the US' strategic push to diversify away from China and deepen ties with countries like India. This, combined with growing global demand for digital infrastructure, AI, and cybersecurity, offers a medium-term growth opportunity. Sonam Srivastava advises a selective investment approach: 'Investors should focus on companies with annuity-heavy revenue models, strong AI/cloud capabilities, and exposure to cost-takeout deals. Large-cap players like Infosys and TCS with resilient pipelines and cost optimisation potential offer relative safety as we head into FY26." Disclaimer:Disclaimer: The views and investment tips by experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions. First Published: May 22, 2025, 13:38 IST
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Business Standard
21-05-2025
- Business
- Business Standard
'Not a buying moment': Analysts wary of IT stocks amid Moody's US downgrade
Moody's downgrades US rating: Analysts see IT sector taking longer-than-expected to yield returns. Investors, they believe, should brace for near-term pressure New Delhi IT stocks to buy/sell: Investors holding information technology (IT) stocks in their portfolios seem to be stuck at crossroads. While US President Donald Trump's 90-day tariff pause and hard negotiations to strike deals with various countries, including India and China, lifted sentiment, Moody's downgrade of the economy's credit ratings has clouded the outlook. Moody's downgrades US ratings On May 16, Moody's Ratings downgraded the US' long-term issuer and senior unsecured ratings by one notch to 'Aa1' from 'Aaa'. This ended the US' top-tier sovereign credit status as the agency saw the States grappling with sustained fiscal deterioration, rising debt levels, and growing interest burdens. Analysts said Moody's downgrade of US' credit ratings, which follows similar actions by Fitch and S&P, hint at tighter government spending and potentially reduced discretionary IT budgets. "Given that there is a direct correlation between the US' GDP growth and tech spending by corporates, the prospects of IT companies look rather dim in the near-term. The single digit revenue growth rates of IT companies do not warrant their expensive valuations," cautioned VK Vijayakumar, chief investment strategist at Geojit Investments. Going ahead, analysts see near-term pressure on IT stocks amid rising sectoral headwinds and expensive valuations. Long-term investors, they added, should wait for further correction in IT stock to enter the pack. "This is not a broad-based 'buy-the-sector' moment. While the sector has underperformed, valuations are not uniformly cheap yet, and earnings downgrades are still trickling in for financial year 2025-26 (FY26). Patience will be key," said Sonam Srivastava, founder and fund manager at Wright Research. So far in calendar year 2025, Nifty IT stocks have tumbled between 7.6 per cent and 34 per cent on the National Stock Exchange, dragged by Oracle Financial Services, Wipro, Infosys, Coforge, Tata Consultancy Services (TCS), and HCL Tech. Valuation-wise, the Nifty IT index is trading at a price-to-earnings (P/E) multiple of 29.1 times as against its 5-year average of 29.3x. Among individual stocks, Coforge is at 67.5x vs 44.3x, HCL Tech at 25.8x vs 22.7x, and Tech M at 36.7x vs 28.5x, Bloomberg data shows. ALSO READ | Pharma shares in focus; GSK, Jubilant, Eris, Gland, Torrent rally up to 8% Should you buy IT stocks? According to analysts, while deal conversion cycles have elongated, especially for discretionary and transformation-driven project, US' push to de-risk China and strengthen trade ties with like-minded economies, including India, creates a structural tailwind for Indian IT over the medium-term, particularly for firms aligned with digital infrastructure, artificial intelligence (AI), and cybersecurity. Investment strategy for IT stocks, Sonam Srivastava of Wright Research said, should be to focus on selective accumulation. "Investors should emphasize companies with annuity-heavy revenue, exposure to cost-takeout deals, and strong positioning in AI/cloud. The sector could see tailwinds later in FY26 as global tech spends bottom out and trade realignments play out in India's favor," she said, adding that large-cap players with resilient deal pipelines and cost optimisation tailwinds, like Infosys and TCS, offer relative safety. Echoing similar views, Apurva Sheth, head of market perspectives and research at SAMCO Securities, said the US efforts to secure trade deals and stabilise inflation offer long-term tailwinds. "As GenAI adoption, cost takeout deals, and cloud modernisation remain strong themes investors should focus on tier-I names like Infosys, TCS, and HCL Tech, while staying selective on midcaps," he suggested.
