Bottom-fishing off, outlook stable

This weekend, March 15, will bring the proverbial Ides of March, an expression made famous by Shakespeare in Julius Caesar to signify impending doom. But investors can take heart that at least for now, leading market pundits are by and large sticking to their earnings outlooks.

However, investor sentiment has turned against bottom-fishing.

Raamdeo Agrawal, director at Motilal Oswal Financial Services, a conservative broking house focusing on underlying stock value, told Hindustan Times that there has been no serious downgrade of overall economic growth rate yet by any key agency.

“Given this situation we still are looking at a corporate earnings growth rate of 20 per cent for next year, which would put the Sensex earnings at Rs 1050 as against current year’s earnings of Rs 860,” he said.

“But if we look at the current Sensex range of 15,400-15500, we realize that the market is building up for a 15 per cent kind of corporate earnings growth and not 20 per cent,” he added on a note of caution.

“Investors should resist from taking leveraged positions and should resist from bottomfishing without an understanding of the stocks,” Agrawal said.

Gopal Agrawal, Head of Equities, Mirae Asset Management, said his concern was over the erosion of chances of an interest rate cut that could fuel growth.

“The rupee has also started depreciating against dollar contrary to the dollar weakening against other currencies. This has reduced the possibility of an interest rate cut and that is the new reality,” he said.

“But I really don’t thing that there will be a serious impact on the corporate earnings growth,” he added.