Mkts may see 10-15% correction: Max New York Life Insurance Moneycontrol.com
A: We think the markets are looking a little expensive on near-term earnings fundamentals with valuations around 16-16.5 forward earnings and macroeconomic outlook of higher inflation and bond yields going up. I think this is an environment where it will be good time, given that we have had good rally over the last nine odd months in the equity markets in India, for the markets to correct a little bit, consolidate and then move forward.
Our sense is that the markets have gone up over the last few months, especially in the last three-four months primarily driven by easy liquidity conditions across the globe. Our sense is that liquidity not only domestically, but also internationally would probably tighten from here onwards. There are several concerns in the global markets, be it sovereign concern, be it chances of double dip given the labour market conditions, credit market and so forth. We think the economic outlook is in favour of little bit of caution and that’s how our portfolio is positioned. We think the markets should correct a bit, it could be a 10-15% correction and that would be healthy from a slightly medium-term perspective.
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