Having experience of more than 17 years in Equity Market Vaibhav Sanghvi of Avendus Capital Had a long discussion with Moneycontrol on the current geopolitical situation, the country’s economy and the market. In this conversation, he said that the increase in the prices of fuel prices is inevitable. The increase in fuel price is natural due to increase in crude oil prices and hike in excise duty. But we also have to strike a balance between growth and inflation. Due to the increase in crude oil prices all over the world after the ongoing war between Russia-Ukraine, most of the analysts believe that the prices of petrol and diesel will definitely increase after the state elections.
Vaibhav Shanghvi also said that this increase in crude oil prices is temporary. It is likely that the RBI will stick to its forecast on growth and inflation so far. Because he is of the opinion that inflation is temporary and it will come down on its own.
Talking about the ongoing tension between Russia and Ukraine, he said that there is a possibility of talks between the US and Ukraine due to the imposition of sanctions on the US and the West on Russia. If this negotiation progresses and the tension between the two countries eases, then commodity prices may appear to fall and the markets of the whole world will get relief from this.
If current geopolitical tensions persist, the US Fed may ease its stance and will review it at its upcoming meeting if the US Fed raises its interest rates by 0.25 per cent.
He further said that taking into account the past geopolitical tensions, it is known that the effect of such developments does not remain in the market for long. Once this crisis passes, the market will be seen moving ahead once all the worries are over and the economy will also get a bounce back. We hope that this crisis also ends soon.
Talking about the continuous sell-off by FIIs in the Indian markets, he said that FIIs have been a consistent net seller for the last 5 months. At the same time, the overweight position in MSCI Emerging Markets is at its medium term low. In such a situation, we expect that soon the selling of foreign institutional investors will be seen to stop.
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Talking about his favorite sectors, he said that going forward, we will see good growth in banking, industrial, renewable energy and select auto stocks. It would be advisable to invest from a long perspective in quality stocks related to this sector. The government has continuously focused on schemes like PLI to overcome the problems related to supply. Along with this, the government has a big investment plan on infra. The benefit of which will be seen in the stocks associated with these sectors.
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