Speaking to ET Now, Dewan said investors should avoid trying to perfectly time the market and instead use periods of uncertainty to gradually build positions in fundamentally strong companies.
“Oil was the biggest worry for us, and I think that was also one of the reasons why FIIs were not looking at India. Now that oil has come down considerably and we are at very good levels already, it may come down further if things remain alright in the Middle East.”
He said his investment approach over the past several days has remained consistent despite geopolitical uncertainties.
“Like I recommended earlier on the show, we have been accumulating stocks because no one really knows when things will turn around or when a deal will happen. We have to keep those things in perspective and keep accumulating good stocks while we are getting good opportunities.”
Dewan noted that many mid- and small-cap stocks had corrected after the sharp sell-off earlier this year and are now witnessing renewed buying interest.”Financials is one sector where we have accumulated, and we are getting some returns as well. Defence has also started moving up after a period of consolidation. For long-term investors, there is still good scope. Railway and infrastructure-related stocks are also available at decent valuations.”While he acknowledged that concerns around inflation, the monsoon and global economic developments will continue to create volatility, he believes such phases should be viewed as buying opportunities.
“There will still be worries because of inflation data, both here and in the US, and monsoon-related developments will be tracked closely. These kinds of events will keep giving opportunities. If someone is investing for the next one to two years, they will get these opportunities over the next couple of months.”
BSE Correction Could Be a Buying OpportunityWith the anticipated NSE IPO drawing investor attention, Dewan expects some short-term pressure on BSE shares but does not see it as a structural concern.
“In the short term, there may be some correction because people may feel BSE is already expensive, and there will be speculation about the valuation at which NSE will come. But demand for NSE will be really strong, and the listing can also be strong.”
He believes any meaningful correction in BSE could present an attractive entry point.
“If you see a 10%, 12% or even 15% correction in BSE, I think that would be an opportunity. Once the NSE pricing is known and we see the kind of demand and listing performance, money will again start coming into BSE.”
Addressing concerns that investors could shift capital from BSE to the upcoming NSE issue, Dewan said any such movement is likely to be temporary.
“From now till the issue comes, there can be some correction in BSE and some money may flow to NSE. But that correction would be an opportunity because there is enough demand for capital market-related themes.”
He pointed to the strong performance of listed brokerages and asset management companies as evidence that investor appetite for the capital markets theme remains intact.
“The demand is there and the appetite is there. There may be an initial hiccup because of valuation speculation, but after that, the pickup in BSE volumes, especially in futures and options, will again create opportunities if the stock corrects.”
Metals Continue to Look AttractiveDewan also remains constructive on the metals sector, expecting demand to stay healthy across multiple geographies.
“Metals should do well because demand is going to continue from the domestic market, the US, and now some demand will also come from the Middle East due to construction and rebuilding activities.”
While he expects aluminium stocks could witness near-term corrections, his broader outlook remains positive.
“There can be some correction in aluminium in the near term, but over the medium term, I am quite positive on the metal space.”
Realty Recovery Still Depends on Rates and DemandOn real estate, Dewan believes the recent gains are largely driven by value buying rather than a broad-based improvement in demand.
He observed that Mumbai’s property market has shown stronger momentum than the National Capital Region (NCR), where demand remains relatively subdued.
“Till now, the buying in the realty space is more because of value buying. The stocks did not do that well over the last one to one-and-a-half years. Mumbai and nearby areas started moving earlier, but in NCR, demand is still a little sluggish.”
He added that developers in NCR are proceeding cautiously, with fewer launches than expected.
“The kind of launches we were expecting are not coming because people are still waiting to see whether demand is going to be good or not.”
Looking ahead, Dewan said inflation, interest rates and the monsoon will determine the sector’s next move.
“A close watch has to be kept on inflation and how interest rates are going to pan out. If we get a better monsoon than expected and interest rate hikes do not happen in the near future, then realty stocks would have bottomed and could start doing well again.”
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