The worst may be behind us and investors should add stocks of the companies that report good quarterly earnings, said Roop Bhootra, CEO, Investment Services, Anand Rathi Shares and Stock Brokers, in an interview with the Economic Times (ET).
"I think the worst is behind us and now it’s up to the corporate results which should decide further course in the markets. Investors could start looking at adding some positions in companies reporting better results," Bhootra told ET.
Bhootra attributed the recent gains in the market to the last US Fed commentary which was less hawkish while the return of foreign investors to the Indian market is also supporting the market. Besides, the market was already oversold so some bounce was expected.
Market clocked healthy gains in July. Sensex, Nifty and BSE Smallcap indices jumped 9% each in July while the BSE Midcap index clocked a gain of 11%.
The metal sector jumped over 7% in July but it may see some pressure along with occasional relief rally till macro headwinds remain.
"The sector could continue to remain under pressure barring some relief rally till macro headwinds remain. The sectors which should perform better are Financials, Manufacturing and Capital Goods, Specialty chemicals, and IT also attractive at current valuations," said Bhootra.
IT and financials are the two sectors that can do well and participate in the Nifty rally, said Bhootra.
"I think financials will participate in the next leg of the rally as credit growth is good and upcoming festive season augurs well while IT which is now trading at attractive valuations and both being almost 50% in weights should participate if Nifty rally continues, also some support could also come from manufacturing and industrials," he said.
Disclaimer: This article is based on an ET interview. The views and recommendations made above are those of the analyst and not of MintGenie.