‘Rally Not Led by Liquidity Only’
In an interview to ET Now, Sanjay Dutt of Quantum Securities, says liquidity and structural changes like demonetisation and Goods and Services Tax (GST) are contributing to the current rally in markets. Edited excerpts:
How much can recent momentum drive markets up by? There is a structural change that has happened in India which is the combination of the demonetisation and GST. So a combination of two — liquidity flows as well as fundamental changes happening in the way businesses are going to be done in India — are contributing to this rally and not just pure liquidity.
The last few weeks have been liquidity-led but people who have been caught completely off-guard with demonetisation are seeing right now a substantial correction of that and things are likely to remain positive in the year ahead.
Do you think 2017 would be a rewarding year for equities? It is mainly because fundamentals are in place and barring major negative events that may come in from overseas that may prove to be a shock to the domestic fundamentals or cause some other structural change within the global setup. Otherwise, as things stand right now, and what one can see in the foreseeable future, I do not see any reason why the market should not be and will not be in uncharted territories.
Which sectors or stocks interest you? It is going to be across the board. Good companies are going to benefit from the turnaround in the economy, the structural changes that are happening. It is the large organised sector which will benefit a lot out of GST as well as demonetisation. A lot of unaccounted, unorganised business would be adversely impacted.