Short-term dips seen as healthy realignments, not trend reversals: Deven Choksey

Synopsis

Deven Choksey of DRChoksey FinServ Pvt. Ltd. suggests the market is experiencing sector and stock rotations, with investors shifting from significantly appreciated stocks like Reliance to previously neglected sectors such as metals, public sector banks, and IT.

"So, this market is all about quick shifting and getting into the momentum based stocks at any given point of time," says Deven Choksey, MD, DRChoksey FinServ Pvt. Ltd.

I wanted to try and understand how should one gauge this sort of a market because at one point in time you had a significant downturn in the market, you were very sure that the markets are only going to drift lower, then you saw a rally in the market and you were sure that the rally will continue. Now markets are in a consolidatory phase, so what should you do? What should be the strategy, wait, watch, and hold on to it?
Deven Choksey: Well, as I understand, the market is now experiencing the sector and the stock rotations in a significant manner. Those stocks which have significantly appreciated, likes of Reliance included, they are probably finding some exit.

So, as we see it, the markets are wanting to get into the momentum once again and that is why you are seeing a shift happening in rotational manner. We probably would like to believe that those sectors and the stocks therein which are neglected up till now, say for example, metals I talked about or for that matter even public sector banks or for that matter even IT companies, probably you might see the preference going into them when the sectoral rotation takes place. So, this market is all about quick shifting and getting into the momentum based stocks at any given point of time.

Want to understand the kind of market moves that we have seen today in particular. We were expected to open at a very decent level above the 25,000 mark, forget 25,000, right now even sustaining above 24,700 is seeming like a big task for the market. Help us understand if this is purely profit booking, if this is global sentiment weighing on our market or what are the factors at play because there has not been any incrementally negative news coming in for our markets across the breadth to be reacting so sharply today.
Deven Choksey: Well, yes, no negative news for sure and we are looking at the market to cross the higher levels, maybe crossing 25,200 in a due course of time. But before it happens, some part of the rotation, some part of the profit booking, some part of the shifting from the largecap heavyweight stocks to some of the neglected up till now those kind of sectors or the stocks are gaining the preference at this point of time and that is the reason for which we are seeing the slightly lower trajectory of the index right now and profit booking in the heavyweight stocks like Reliance which I mentioned earlier.

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