The country's leading insurance player SBI Life advocates booking profits from stock markets and this has been held the view by company's Chief Investment Officer whose company has investments in primarily large-cap stocks.
This he suggests as the valuation looks fairly stretched and the return to sounds earning growth will take some time. In the past one year, there were global and domestic factors such as the fears around the election outcome and due to it investor put their bets on large-cap stocks and avoided mid-and small-cap stocks. And as a result, Nifty and Sensex rose by around 10%, while at the same mid- and small-cap index fell sharply by as much as 15% and 29%, respectively.
And now as the investor sentiment has calmed after the re-election of Modi as the new Prime Minister, the foray has been turned to the steps taken to revive the economy i.e. facing slowdown across sector amid liquidity crisis. Fund managers have moved their position from large names in consumer-staple, auto companies' etc. viewing slowdown. IT stocks have also been sold off by the insurer.
SBI Life hopeful from these sectors
Nonetheless as the public sector looks to deploy extra cash towards equity, it is upbeat on banking stocks and will go on bargain-hunting for stocks in the automobile and consumer space i.e. buy the stocks from the sector on dip.
Also, the insurance company sees earnings growth to increase by as much as 14% for the top-50 companies for the current FY given the fewer provision by the bank in lieu of bad debts as distressed accounts are receding at a faster rate.