EMs will outperform US equities; good time to buy auto stocks: Envision Capital

Nilesh Shah, MD & CEO, Envision Capital, believes emerging markets will outperform US equities, going ahead. Shah is of the opinion that state elections have a limited impact on the market. According to him, the correction currently being seen in the market is not out of the ordinary.

He said, “It’s always hard to say which way this particular development will play out going forward and that could lead to some more corrections, but so far it has not been anything unusual from the kind of correction that we have seen over the course of the last couple of years.”

On sectors, Shah believes it is a good time to buy auto stocks. As far as IT is concerned, he explained that if the companies fall 10 percent, it could present a good entry opportunity.

“In the very short to medium-term, the stock prices of IT sector depends a lot in terms of how the Nasdaq moves and that’s, of course, more a directional. So if there would be another 5-10 percent correction in some of the IT names, I think they would come back on the buy list,” he said.

On ONGC, he shared that he will avoid the stock despite the spike in crude price. He opined that ONGC is more of a trading bet rather than an investment idea.

“Apart from the short-term trading moves that you can get, but beyond that, these are not investment bets because you do not know how much ONGC will get to retain from this abnormal rise in crude oil prices. So enjoy the ride if you are a trader on long, otherwise, beyond that, I do not think this merits investments,” said Shah.