We are just playing out a very massive equity bull market globally and the genesis of the bull market is in the US bond yields. Easy money is just sloshing around. We do have headwinds like the coronavirus fear, and markets don’t like uncertainty. China is going to be struggling but there is liquidity in the market and you have to respect that, said Atul Suri, CEO, Marathon Trends PMS.
“I think that there is a big surge of global liquidity and we (Indian markets) are part of global equity bull market. So, I feel that we have a lot more legs globally to move on,” he said in an interview with CNBC-TV18.
Talking about the performance of the market, he said it is across the board and it is not about midcap or largecaps but it is all about performance. In the last month and half the midcap index has outperformed the Nifty.
“To make a sustainable bull market, we have to see consistent earnings. So in a market that is oversold, you will see pullback rallies but to have a sustainable bull market, to have a trend ultimately you will have to see sustainable earnings, " said Suri, adding that you will find blips, but you have to be very careful.
"As an investor you have to be able to bifurcate that are these short covering rallies or pullbacks for you to exit some of your dead stocks or if there is a tailwinds of earnings, then that makes a case for a sustainable upmove. So, ultimately we have to see the fundamental factors playing out, we have to see earnings play out,” said Suri.
When asked if he though the pharma index had bottomed out and made multi-year bottom, he said, “I don't think so because some of the largecap names, which are the mover of the index have not given you that kind of earnings momentum. What you see in the pharma is very selective stocks are performing. As a trend investor, I would deviate or have those spaces in my portfolio where you are seeing consistent earnings but selectively."
"I think the market is not going to be very broad-based in terms of everything is going to move up, it is going to reward earnings,” said Suri.
In terms of Nifty levels, he said, “I have been talking about 13,500 and it is a year to a year and a half target. From here also we can have a 12-13-14 percent upmove but I play for longer-term trends. We are seeing this big global liquidity surge, so ultimately we are in an uptrend, and there is money to be made. We will have budgets and virus of whose outcome we don't know but the fact is that global markets are on a tear .”