Domestic cyclicals looking attractive; prefer largecap IT cos: Max Life Insurance

Mihir Vora, director and chief investment officer (CIO) of Max Life Insurance, on Thursday, said that domestic cyclicals are looking more attractive now.

According to him, excessive stimulus has resulted in supply side bottlenecks. Vora said, “The kind of fiscal stimulus and monetary stimulus we have seen is unprecedented, never seen anything like this before. This has led to, on one hand, job creation but on the other hand, it has also created so much demand that there are supply bottlenecks.”

On IT sector, Vora shared that he is biased towards the largecap IT players. Additionally, he mentioned that some of the valuations in the sector have gotten stretched in the near-term.

He said, “We fundamentally continue to believe in the IT story. It is just that some of the valuations probably have gotten stretched as far as the shorter term is concerned. Within IT, we are now more biased towards the largecap IT because there is a bit of froth, I would say, in the midcap IT segment.”

Sharing his expectation about the overall Indian market, Vora said that it will perform well despite the volatility. However, he cautions that investors must be ready for more volatility, going ahead.

On US market, he mentioned that US Fed needs to taper interest rates due to strong growth.

“It must be kept in mind that the taper is happening because global and especially US growth is very strong, probably too hot to handle, which is creating inflationary expectations and pressures and that is the reason why Fed needs to tighten,” he said.