Omicron largely behind us and economic revival intact so reopening plays a good bet: Kotak Institutional Equities' Sanjeev Prasad

Speaking with CNBC-TV18 on Monday, Sanjeev Prasad, Managing Director and Co-Head at Kotak Institutional Equities, said that the Omicron crisis is largely behind us while economic revival seems to be intact.

“Our sense is that in the second half the RBI will raise rates by about 50 bps – that’s on the policy on the repo rate side; repo rate could see an earlier increase. So, that’s our problem with this market is that the starting point is not that great; valuations are high and interest rates will go up,” he said.

This makes him believe stocks that are a play on reopening themes like banks, capital goods, industrials etc., would be a wise bet.

Meanwhile, at a time when several market experts have voiced their concerns about valuations being expensive, Prasad has seconded the view. In fact, he also believes that interest rates are set to an inch higher.

“There is a potential risk in the form of something went wrong with respect to either post-pandemic policy of the central banks; all of us will see what they are doing, inflation will come off and with a combination of modest interest rate increase and low inflation, the interest rates will be back to neutral territory,” he said.