Expect earnings to be under market expectations, says Ashwini Agarwal
In this week's episode of Editors' Roundtable, the spotlight is on what to expect from the second-quarter earnings, why theme-based funds are back in vogue and we take stock of how outflows from emerging markets are slowing.
Financials led the recovery on Dalal Street on Friday, which helped the market end a volatile session at the flatline. For the week, Nifty and Sensex snapped its 3-week losing streak to end in the green.
In this week's episode of Editors' Roundtable, the spotlight is on what to expect from the second-quarter earnings, why theme-based funds are back in vogue and we take stock of how outflows from emerging markets are slowing.
Speaking to CNBC-TV18, Ashwini Agarwal, Founder & Partner at Demeter Advisors, said, “The world is in a very uncertain place. The focus is going to be on quarterly earnings from next week onwards, and I expect the earnings to be not as good as what the market is hoping for. I would focus a lot more on the commentary than the numbers themselves."
Agarwal added, "I think the commentary could be a little soft because at the margin, I see demand trends softening, both export lead as well as domestic. So I am a little cautious, I continue to be a little cautious and I see very limited room for a broad-based upside from here.”
On IT, Agarwal said, “A lot of the bad news is in the price. So IT is one area where I have been struggling, where I have been negative for a while, stock prices have come off. These best-of-breed companies in terms of governance in terms of cash conversion, in terms of dividend yields. So at some point they will become a buyer. IT is one area where I am looking for, for an opportunity to invest not right away, but maybe 5-10 percent lower.”
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