We believe that the concerns over the
Indian equity market are being overdone. We believe that the
worst is over for our market.
While the correction in our market as
well as in the other equity and commodity markets across the
emerging economies happened because of the fear that the US
Federal Reserve (Fed) may continue to hike the Fed rate, we
believe that the rate hike has already been discounted by
market players.
Consequently any pause taken by the Fed
in the rate hike exercise will be a big positive for them.
To be on the safer side, we prefer to
take exposure to large-cap stocks rather than mid-cap and
small-cap ones. With a good run-up in the prices of the
mid-cap and small-cap stocks, the gap between the valuation
of the CNX Mid-cap 200 and the Sensex has narrowed down
significantly over the last two years.