Market rally could expand, real estate, cement and cap goods good bets: Nepean Capital’s Gautam Trivedi

Gautam Trivedi, Co-founder of Nepean Capital, believes the current narrow market rally could expand further with real estate, cement and capital goods share looking ripe for long-term investments.

In a conversation with CNBC-TV18, the market veteran shared his insights on Nifty and the broader market’s strong show, with global markets testing record high levels. Trivedi expects the upward trajectory of the Indian stock market to continue, going forward.

Trivedi noted the global phenomenon of markets hitting record highs, with indices like Nikkei, Dax and Cac surpassing their previous records. With the Nifty nearing its all-time high, he expects the upward trajectory to continue.

India ranks fourth in terms of foreign inflows, after China, Korea and Taiwan, with approximately $6 billion in inflows year-to-date. He believes that the interest from global investors, particularly in Japan and India, who are allocating more funds to India after being dissatisfied with their investments in China can further boost the market.

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Trivedi emphasized that there is still significant potential for market growth, considering the premium of MSCI India over MSCI Asia Japan, currently around 57-58 percent. However, he cautioned that foreign investors tend to be less involved in small-cap and micro-cap stocks.

While expressing concerns about the narrowness of the rally. He quoted that “the top 10 stocks accounted for over 50 percent of the Nifty 50’s gains since the market’s low in mid-March”. Trivedi stated that foreign investors typically avoid extensive participation in small-cap and micro-cap stocks which could be seen as a major reason for the narrowed market rally.

When asked about whether he is looking into booking profits, staying put or investing more, Gautam replied “ I think this rally will continue and at this point, we are certainly not in the mood to book any major profits.”

While certain sectors such as autos, real estate and defence have experienced significant rallies after years of underperformance, Trivedi sees room for further expansion. He remains cautious about the metals sector, as Nepean Capital is not keen on investing in cyclicals.