Sanjiv Bhasin sees Nifty hitting new high in FY23; bullish on these 2 private bank stocks - IIFL INTERVIEW

Sanjiv Bhasin sees Nifty hitting new high in FY23; bullish on these 2 private bank stocks | IIFL INTERVIEW

NSE Nifty 50 may hit a new record high in this new financial year, surpassing the previous all-time high of 18,604.45, says Sanjiv Bhasin, Director, IIFL Securities. In today’s session, Nifty 50 surpassed 18,100 level, first time after 19 January 2022. In the previous fiscal, the 50-share index offered 19 per cent returns to the investors. In the upcoming RBI MPC, the first meeting of the 2022-23 fiscal, Bhasin forecasts an interest rate hike of 25 bps. He is bullish on rate sensitive sectors such auto, banks, and realty sectors. Apart from Axis Bank and ICICI Bank, Bhasin has also suggested looking at Godrej Properties, Godrej Consumer Products, DLF stocks, among others. Here are edited excerpts from Sanjiv Bhasin’s interview with Surbhi Jain of FinancialExpress.com.

1. How do you see the Axis-Citi deal? Will the Citi deal be bad or good for Axis? What’s the street verdict?

2. U.S. Treasury yield curve inverted on Tuesday for the first time since 2019. What does an inverted curve mean and why is the yield curve inverting now?

Inverted yield curve is when the short term 2 year yields become higher than the 10 year yields, indicating rise in cost of money in the short term or indications of a looming recession in the economy. This is caused this time primarily as the Federal Reserve was behind the curve & not raising rates as he felt the inflation was transitory & let it rise. However, now the Fed seems to have turned more ‘hawkish’ than anticipated & will look to raise rates faster than expected to cool inflation & reduce the balance sheet which is running record debt of over US$ 23 trillion. However, we feel this may be short lived as the going away of Covid finally along with return of the labour force coupled with no more free handouts will see wage inflation fall & also the short term aberration in fuel prices caused by the geopolitical tensions may subside in the next 2 months.

3. Do you see recent corrections in stock markets as an opportunity to enter?

Well, there was the best opportunity of buying the fear which came in the 1st week of March when the 1st bombs fell. Historically markets bottom out when the 1st bombs fall & we saw the best rally in over 3 years in the last fortnight with indices rallying over 12-18%. We still think there may be more opportunity to buy any corrections as markets have already priced in higher rates & the short term geopolitical risk. Rates are rising due to growth & not stagflation which means corporates will see strong earnings in coming quarters.

4. Where do you see rate sensitive stocks — banks, auto, realty — ahead of RBI MPC? Do you see RBI Guv hiking interest rates this time?

Maybe 25 basis points, however Indian inflation outlook still looks benign & the shock in crude may be coming to an end as Russia itself is looking to offer oil 35% cheaper than global prices. I am bullish on banks, auto, and realty, as they have underperformed and may outperform in the 2nd half of the year as demand exceeds supply. Reality is in a sweet spot as the double wealth effect of rising stocks & gold make the best opportunity to own hard assets like land with demand from good builders seeing the best in over 5 years.

5. What is your outlook for Indian stock markets for the new financial year?

Test of 18600 & maybe new highs sooner than most expected as foreign selling ends & buying from retail continues to see best SIP flows ever witnessed.

6. What are the key themes, sectors and stocks to focus on in the new financial year?

Key sectors such as Reality, construction, banks, infrastructure & PSU stocks will remain in focus. Stocks of Godrej Properties, Godrej Consumer Products, DLF, Axis Bank, ICICI Bank, Sterling and Wilson Renewable Energy, and IRB Infrastructure Developers will be in focus in the new financial year.