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Govt paper a near term headwind; like cyclicals: ICICI Pru

Gunwani sees improving macro-economic environment as a major trigger for earnings growth.

The market could consolidate or even correct near term as valuations are looking “stiff” after the recent run up, says Manish Gunwani, Senior Fund Manager, ICICI Prudential AMC. He sees supply of divestment share offerings as a short term headwind for the market.

In an interview to CNBC-TV18, Gunwani says he expects some minor earnings downgrades in the near to medium term, but adds the market looks good from a 2-3 year perspective. He sees improving macro-economic environment as a major trigger for earnings growth.

Gunwani expects current account to strengthen over the next couple of quarters. He is bullish on domestic cyclicals, but advises investors to take a stock specific view.

Gunwani is bullish on the oil sector, but prefers downstream companies like oil marketers over upstream companies like explorers. He does not expect the rupee to strengthen much as policy makers would not be in favour of it.

Q Rating of a bond indicates its:

  • Reinvestment risk
  • Default risk
  • Inflation risk
  • Interest-rate risk

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