INSUBCONTINENT EXCLUSIVE:
NEW DELHI: If you thought the painful correction seen in domestic equities over the past few days has wiped off all the froth, you may be in
for surprise.
Market veteran Saurabh Mukherjea, often cited as among the few analysts who had predicted the 2008 global financial crisis,
says the India market has 10-15 per cent more downside before it reaches fair value.
The benchmark indices are already down 13-14 per cent
in the ongoing correction since late August, which has wiped out all the gains recorded earlier this year.
On Thursday, Sensex tanked as
much as 1,000 points in line with a global equity selloff, but paired the losses by a half later in the day.
Talking to ET Now, a sister
concern of ETMarkets.com, Mukherjea said the market should correction at least 10 per cent from its current level
A host of brokerages have also turned cautious on domestic equities.
Standard Chartered in an equity note on Wednesday kept its tone
cautious, citing stretched valuations
In a separate note, Credit Suisse Wealth Management says stocks should grind lower in the coming months, as India Inc is expected to witness
further earnings downgrades, after September quarter numbers, led mainly by financials and consumer discretionary plays, including auto
stocks.
Till the end of Wednesday, BSE Sensex had fallen 5,200 points to 33,723 from a record high of 38,989 it had hit on August
29.
Mukherjea, founder of Marcellus Investment Manager, said he expects a derating of many financial stocks, which account for over
I have been saying repeatedly that the biggest pocket of overvaluation in the Indian market was in financial services; their valuations made
no sense at all a month ago
A further derating will come in the wholesale-funded lenders, in particular
There is still value in IT
trades at 20 times EPS of FY19E, off from its recent high, but still rich
