A potential recession in the US will not be a key trigger for the Indian market and that any such prospect has been priced in, Gautam Shah of Goldilocks Premium Research told CNBC-TV18 on Friday. "I think a lot of the recession has been priced in," Shah said, adding that the market knows what lies ahead in terms of the recession over the next six months.
"I don't think that is going to be a very big trigger," he said.
However, despite recession prospects being priced in, Shah expects the Indian benchmark Nifty 50 to trade in a range over the near to medium term, particularly with a negative bias. Describing the range, he said 17,800 on the downside and 18,400 on the upside will be the key levels to watch and moving further up from current levels, will be higher for the benchmark index.
The Nifty 50 index has rallied nearly 1,500 points from its March 20 low of 16,828, while the Nifty Bank fell 0.1 points short of scaling its all-time high of 44,151.8. Shah said that the Nifty Bank at current levels appears overheated as the entire recent rally was led by banking names. Although he is not negative on the space, but would prefer taking profits off the table.
Among sectors, the Nifty Auto index has rallied nearly 8 percent over the last one month and Shah expects this trend to continue as the charts, according to him, are "excellent." He further added that their working target on the Nifty Auto index is 15,000 - 15,500, implying a further 12-15 percent upside from current levels. "In case the overall market were to see some sort of dip in the near term, Autos are clearly a buy," he said.
Another sector that Shah is betting on is Real Estate, the index of which has also rallied over 7 percent in the last one month. He sees "substantial upside" in the entire real estate space even from current levels. "We recommend topping up on every and every single dip," Shah said.
While PSUs is another theme that excites Shah, he would want to remain cautious on the Metal space. The Nifty Metal index has declined 1.5 percent over the last month. Shah advised investors to “stay away” from the space as he believes that the sector didn’t do well in the good times and continues to be under a lot of pressure as the markets are pulling back.
(Edited by : Hormaz Fatakia)
