Hard to say if Nifty has bottomed out at 7,500: Marathon Trends' Atul Suri

Volatility in the market continues as there are fears of a global meltdown due to the coronavirus pandemic that has brought economic activity to a standstill across the world.

Atul Suri, CEO of Marathon Trends – PMS shared his views and outlook on the Indian market.

When asked if market is recovering and if it had bottomed out at 7,500 points, he said, “It is hard to say because when we see the bottom of the past, I feel that it is a process and in the given situation, the decreasing number of cases in New York for a few days does not put an end to this nightmare. So I think that there are going to be many stages to this, I feel that scientific breakthroughs are going to be very important or ultimately the end game would be indicated there - an anti-viral in the short run for coronavirus or a vaccine in the long run would get a closure to this situation. Ultimately we will require some scientific breakthrough.”

Speaking about the Nifty touching 7,500, he said, “7,500 is an important level because they were recent lows and keep your fingers crossed that it doesn’t get violated again. It will then bring in another round of selling and on the upside, I find 9,000 in the short-term will be the area of resistance. So at the moment, the bigger story is not going to be where the index is or how it will bottom out, I think that you are going to see a lot of sectoral churn.”

He continued, “I feel a lot of marquee sectors that were there in the earlier up-move are going to be challenged. The hammering that you have seen in the best of names, in the month of March, is 40-50 percent. I think the shift or the sectoral churn is a place, which you will have a handle on. It is going to be very difficult to call a bottom.”

On the pharmaceutical sector, he noted, “Whenever sectors are over-owned, there is always a risk that whenever there is disappointment, there is unwinding to happen and a sector that is under-owned and if something positive comes up, there is a need to get to equal weight. That shift also in all the funds, portfolios, PMSs, mutual funds – all are overweight banks and financials, even I was till last month. So the shift that is going to happen can work on the thesis that the leadership could be shifting, it is very early days but yes at this stage rather than trying to find the bottom, as a fund manager I am more busy in trying to make the shifts in my portfolio. I would like to sell when markets rally and I would like to buy when markets fall within this bands or ranges or days of extreme volatility.”

“New opportunities will emerge. For me to take advantage of the pullback of the next bull market whenever it comes, I need to be in those leaders and that is going to be the game changer for me,” he said.

“The markets will continue to be volatile and we need to look at all our stocks and see how bulletproof they are or go through a stress test or look at those sectors or themes where we are underweight and where new leadership could emerge,” Suri added.