Bullish on PSU banks, buy gold also, says Rahul Chadha of Mirae Asset Global Investments

In the current market scenario, one should invest not only in equities but gold too, said Rahul Chadha, CIO, Mirae Asset Global Investments, in an interview with ET Now.

"Gold should do well in these times with inflation coming through and with this huge volatility in global policymaking where the US and Europe are putting all these sanctions on Russia. So apart from equities, one should be bullish on gold," said Chadha.

Gold prices have risen about 7 percent in international markets in the current calendar year so far even as rising US treasury yields, dollar and looming aggressive rate hikes by the US Fed have capped the yellow metal's rise.

Domestic gold funds have given an average return of 11 percent year-to-date beating most equity and debt schemes amid high inflation.

Gold's outlook for this year will depend on how the rate hikes shape up while inflation also remains a key factor that will influence gold prices.

Meanwhile, in the equity space, Chadha is positive on PSU banks as he thinks PSU banks benefit from more demand for credit in the economy and valuations at the lower end.

"We see robust NII growth for these banks. They may get a near-term hit because of the rise in G-sec yields but outside that, the business is very attractive," he said.

"These guys benefit from more demand for credit in the economy and valuations at the lower end. So we continue to like the PSU space. The differentiated bets would be high-quality PSU banks; insurance would be attractive as well," Chadha added.

Disclaimer: This article is based on an interview done by ET Now. The views and recommendations made above are those of the analyst and not of Mint Genie.