The Indian market may see a deep correction in the next six to 12 months and it may be harmful to short term investors to bottom fish in this market, said Girish Pai, Head of Research, Nirmal Bang Institutional Equities, in an interview with ET Now.
"I do not want to go and bottom fish right now and so unless you have a three-five year view, you can't possibly ignore the big correction one is going to see from the top in the market over the next six to 12 months," said Pai.
"If you are an institutional client who does bother about daily NAV and monthly and quarterly performance, then this will be a time not to focus so much on performance," he added.
Pai underscored it is the time to focus on saving the capital and one should try to get into quasi cash kind of stocks.
Pai said one should be very defensive and a bit more overweight on some of the consumer staples. "Pharma is a space that one can look at and also some of the private sector banks, which would probably get hit, but may not be hit as much because the valuations have come off quite a bit," said Pai.
Amid the current volatility, Pai said largecaps are what one should focus on. "You should be overweight in quality largecaps because that is where the damage is going to be the least within whichever sector you are in. If you take a 6 to 12-month view and are very focussed on near-term performance, I would say the shift to quality largecaps as that would be where you will conserve capital a lot more," Pai told ET Now.
Sharing his views on the IT stocks, Pai said he would not rush into buying Indian technology stocks right now.
"Yes there is a digital paradigm, digital transformation services, acceleration that will play out over multiple years but there is going to be a bit of a cyclical speed breaker in the next 12 to 18 months," he said.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies and not of MintGenie.