24 May 2022
The start of 2022-23 (Apr-Mar) has not been very good for equities in India.
The Nifty 50 lost about 2% in April, while the Nifty Small-cap 100 index lost about 1.7% as investors focused on the policy moves taken by central banks in India as well as the world.
A spike in inflation and the ongoing geopolitical tension because of the war between Russia and Ukraine was the other major concern for investors.
What’s in store for the month of May?
While there have been no major downgrades in earnings estimates for 2022-23 (Apr-Mar) so far amid corporate earnings announcements, higher commodity prices and bottlenecks in the supply chain are risks that need to be monitored, said Shibani Kurian, fund manager at Kotak Mahindra Asset Management Co. Ltd.
Ms. Kurian expects margin headwinds in the June quarter, but expects concerns around crude oil and commodity prices to decrease in the second half of the current financial year.
She expects some volatility in the near term but said that one could look at selectively picking up stocks.
“This year would be a year of bottom-up stock picking. While markets may not be very cheap on valuations, stocks have corrected.” Ms. Kurian said, while discussing the monthly outlook for May.
The fund house intends to prefer companies with strong balance sheets and cash flows, low leverage and reasonable valuations, Ms. Kurian said.
Ms. Kurian said, adding that ultimately, investors must follow a disciplined approach when it comes to investing, especially when times are volatile.