homemarket NewsNifty50 dips below 17,000: Can't rule out 10% correction in 2022, says Shankar Sharma
Nifty50 dips below 17,000: Can't rule out 10% correction in 2022, says Shankar Sharma
Market veteran Shankar Sharma believes that the markets can see a correction in 2022. He remains bullish on the IT sector while adding that bank stocks might underperform expectations of a stellar run.
Market veteran Shankar Sharma believes that the market has dealt with the worst case outcome of COVID-19 but the investors should not rule out a 10 percent correction in 2022 considering the uptick seen this year.
"Globally we have had 3 up years. Statistically when you have 3 up years in a row, then there is a probability that you will have a down 4th year. So 2022 is likely to be a more troublesome year than what we had anticipated even two months back. So I don't think we should rule out a 10 percent down market given how much we have rallied this year. However I do not think it will be a bear market," he said.
Sharma said when things reverse in a rate cycle, emerging markets are hit the most.
"The rate reversal cycle has surprised me. I did not expect the Fed to say what it said. The COVID virus is a known problem and markets don't fall because of known problems. The markets have dealt with the worst case outcome of the virus in 2020 itself. However, a reversal of the rate cycle is an un-modelled situation and that is one of the reasons why we are in a spot of bother. When things reverse on the rate cycle, usually the worst hit are emerging markets."
Also Read: Sky-high valuations? First Global's Shankar Sharma explains what new-age businesses will have to do
Sharma believes that the IT sector will continue to be a clear winner while banks are likely to underperform.
"Banks have been one of the worst areas to be in since the bull market began last year and I see no reason to reconsider that view. I think IT has been a clear winner and it continues to be a clear winner."
Watch the video for more.
(Edited by : Abhishek Jha)
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