Why are investors cautious even though stock valuations look cheaper? Expert answers

India Today

The ongoing geopolitical tensions have increased global risk aversion, leading investors to remain cautious and avoid committing to long-term investments, says expert.

Transcript

00:09good afternoon you're with us here in business today we're tracking market

00:12closing for you and markets are seeing sharp selling in closing trade we'll get

00:17to that in just a moment let's take you through the headlines markets remain

00:25under pressure amid global jitters Asensic stumbles over 600 points around the 81,000

00:31mark while the nifty slips nearly 200 points to 25,300 FMCG banking auto and

00:37realty stocks lead the broad sell-off while IT stocks buck the trend with

00:41selective buying Prime Minister Narendra Modi pitches a bold reform push at the

00:49post-budget webinar stressing India's economic resilience and calling for a

00:53stronger bond market he urges deeper liquidity new instruments and wider use

00:57of AI blockchain and data analytics to power growth

01:04the Prime Minister will inaugurate Micron's 22,516 crore semiconductor plant in

01:10Sandan tomorrow the facility will produce advanced memory products crucial for AI

01:15positioning India deeper into the global semiconductor supply chain

01:23Mercedes-Benz India hints a possible rise in vehicle prices as tighter cafe 3 fuel

01:28efficiency norms come into focus the company says it backs stricter standards

01:34and remains aligned with Siam adding that public health must take priority

01:38despite higher compliance costs

01:43India's first GDP data under the new series will be released at 4 p.m. today

01:47SBI pegs Q3 FY26 growth at 8.1% slightly below the previous quarters 8.2% with FY23 as

01:56a new base

01:57here the revised numbers could alter policy signals and sectoral dynamics

02:01all right first up India crude oil imports from Russia have increased in February contrary to what

02:13many were expecting after the US pressure on India according to market analyst Kepler Russian

02:19crude imports rose 6% on month in February but were lower by 22% on year imports from Saudi

02:26Arabia

02:26rose 44% while the first imports from Venezuela are expected to land on Indian shores in April so that's

02:34the latest

02:34coming in on crude with continued imports from Russia while Venezuelan crude is going to really kick off a

02:42little later and imports from Saudi Arabia rose 44%

02:50let me take you through the markets at this hour quickly pull them up for you sharp selling pressure being

02:55seen

02:5525 300 is broken 25 146 is actually closer to what we're at currently and broader markets also feeling the

03:04pinch this Friday we've got Abhishek Vasumalik joining us this afternoon Abhishek

03:08good to have you with us take us to what you're seeing really taking place right now we're seeing sharp

03:14hammering coming in across sectors across the board

03:18all indices currently in the red yeah I think and it sort of got you know last I think 10

03:26-15 minutes was a lot I mean very quick sell-off that

03:30happened but I think primarily there's a lot of global uncertainties we were reporting you know I was just watching

03:38before this the war that is now

03:44happening between Afghanistan and Pakistan continuously there is something or the other you know going on the US Iran situation

03:51remains very very volatile so I think there is a sense of a risk of right now across the world

03:59so that's one part and I think you know last time last week when I was on your show you

04:05know I mentioned that we are basically in a range and whenever we are going up

04:10it's correcting whenever we are you know coming to the bottom of that range it's moving up so the news

04:17flows are aiding that but fundamentally you know we are still stuck in that range

04:25okay what are you making of the news around crude at this point Abhishek given that we're still importing from

04:33Russia I think Venezuelan imports kickoff in April

04:38what kind of what kind of impact do you foresee on crude prices in the near future given the latest

04:43that we're hearing in terms of the numbers and source wise breakup of crude oil

04:49so very interestingly I mean we're not seeing any major spike in crude even though there is so much of

04:58you know problems happening in and around the Middle East

05:02there's been problems now with Russia going on for around four years so I don't see any major change in

05:11that with also Venezuelan crude coming into the you know coming back into the global system

05:18probably we don't you know expect that crude prices will go further up from here a couple of dollars here

05:27plus minus wouldn't make any difference

05:30you know to the Indian economy per se

05:37alright so nothing much to fret about in terms of impact on crude prices now let's move on to the

05:43bond market as well bond market reforms will be taken forward to strengthen long term financing and improve liquidity according

05:50to the prime minister at a post budget webinar he stated that the government is working to simplify processes introduce

05:55new instruments and make the system more predictable for investors the

05:59prime minister also called for greater use of technology to enhance transparency and accountability in financial markets

06:06it's useful to let's listen is a

06:08the reform calm

06:09so

06:11okay

06:13I mean

06:19a

06:22a

06:23a

06:24a

06:25now

06:26I

06:26to

06:26or data analytics

06:29का

06:30व्यापक उप्योग कर

06:33transparency

06:35speed

06:37or accountability

06:40बढ़ा नहीं होगी

06:42हम foreign investment framework

06:44को

06:45और सरल कर रहे हैं

06:48हमारा प्रयास

06:50system को

06:53ज़्यादा predictable

06:54stable are investor friendly

06:58banane ka hai

07:00ham long term finance

07:02ko better banane ke liye

07:05bond markets ko

07:08or

07:09jaja sakriya banane ke

07:10dhisa mein bhi kadam u'tha raha

07:12hai

07:14bond ki khari

07:16or bikri ki

07:18prakriya ko

07:20asan banae jara

07:21raha hai

07:222.

07:244.

07:286.

07:3111.

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17:29memory and storage demand. The plant will assemble and package advanced products for

17:34global markets, marking a major milestone in India's chip manufacturing ambitions.

17:39For more on this, we're joined by India Today's Brijeesh Doshi. Brijeesh, take us through

17:43what's on the anvil.

17:45See, this will be the first semiconductor plant that will be innovated in the

17:54Gujarat. The American company Micron has invested almost the amount which they are claiming that

18:02there will be more than 20,000 jobs will be created directly or indirectly due to the

18:06semiconductor assembled plant. This is the assembly plant of the semiconductor unit and

18:11this will be the first plant which is going to be operated from tomorrow onwards. Prime Minister

18:15Ramadi will reach to the Gujarat on the around 3.30 p.m. at Amdabha Airport and then he will

18:22reach to the Sanand, the plant. He will review the plant. He will gather all kinds of information

18:30on how the chips will be assembled here and how it will be distributed, how the company

18:35will work here. So, this all kinds of information will be said to the Prime Minister tomorrow onwards.

18:42There will be a 3.5 km long roadshow tomorrow before this inaugural ceremony in Sanand GRDC of

18:49the plant. So, PM will be welcomed by the local people of the Sanand. You know that how PM greeted

18:57always and had a great welcome in his home state, Gujarat. So, almost there will be a huge roadshow

19:06and after that the plant will be inaugurated which will boost up the semiconductor industry in Gujarat

19:11as well. There are 13 investments that Gujarat government is seeking after these plants. Once this

19:17plant will be operational, fully operational from tomorrow onwards. And then there will be a biggest

19:22plant of Tata in Dholera where we will see the production of the semiconductor chips. This is the

19:28assembly plant of Micron and then there will be a biggest plant of India in Dholera of Tata that

19:36will produce the semiconductor chips. So, this will give the boost to the economy of India as well

19:41and the state of Gujarat both.

19:47All right. Thank you for that, Rajesh. We've got key senior members of Micron's team, of course,

19:56there on ground as well as President CEO Sanjay Mehrotra. We've also got Dixon up about 4% this

20:03afternoon on the back of such developments. Let's take a look at that as well. And there are such other

20:08bright spots in the market as well. So, Dixon is up about 4% right now. We've got like a

20:14Tejas

20:15Networks that's up 17-18%. Reddington is up 15%. Let's take a look at where else perhaps some of the

20:22actions coming from. Just a few spots in the broader markets. I think that's pretty much it in terms of

20:30volume buzzers. And on the downside, of course, it's the banks, Tata Steel, HDFC, Bandhan. We've got Steel

20:37Authority, L&T Finance is down about 5%. Reliance Power is down 4-5% as well. Very heavy volumes

20:44on

20:44some of these as well. Vishal Megamart is down about 8% this afternoon. So, quite a bit of a

20:50cut

20:50coming in there on a Vishal Megamart. I'm just looking at some of the other losers for you as well

20:55across broader markets. And some of the stock market counters, Angel One, for instance, down 5%.

21:02Seat is seeing a sharp cut. IRCTC is down 5% as well. India Cements, Force Motors, Jindal Stainless,

21:09very, very sharp cuts coming in. Canfin is down 4%. Peramal Pharma, 4% growth rich properties.

21:15Real estate as a back is seeing 3-4% cuts across the board. Godrej Industries is down 4%.

21:21Manapuram Finance, 3-4% there on a Manapuram as well. So, you're just seeing pretty much cuts

21:27across the board. But I'm showing you these stocks so you can see the kind of depth of cuts as

21:31well

21:31that are coming in across financials, real estate. Some of these pockets particularly

21:37are seeing, you know, heavy selling coming in. And then across the board pretty much

21:41we're continuing to see that kind of a sell-up. FMCG names as well, you know, seeing a lot of

21:47cuts

21:48as well. On their gainers list, and like I said, it's a bear market, so not too much point running

21:54through any of those names. But a little bit of respite on IT and a few select names like

22:02a Godrej Agrovet or a NetWeb. CPCL, which is an oil exploration counter. AFL is moving today.

22:09So again, mostly to do with tech. Some of amount of a marginal uptick in Aleela.

22:15Just to highlight that, Siemens, Praj, couple of these names are moving. So some of your

22:21industrials, for instance, are seeing a little bit of an uptick there. L&T tech is also up. So

22:27that's clearly the theme, but it's literally like the only theme that's seeing any kind of

22:31respite in the market today. All right. So Abhishek, what do we watch out for next? You know,

22:37things are unclear. The VIX is up 4% in trade today. Global markets, I mean, we'll wait for some

22:43indication. But going by what we're seeing right now, this is clearly a reaction to what's

22:47happening across Pakistan and Afghanistan.

22:50So, you know, thankfully, you know, we're getting into a weekend. So let's see how things

22:56pan out over the next two days and Monday, starting of a new week. Hopefully things will be better

23:03in terms of all the geopolitical situations. So we just will cross our fingers and wait for

23:11it. I wonder what's happening to gold as well. Perhaps let's pull that up because usually we do

23:16see some amount of safe haven buying on the back of such instances as well. Let's just pull up the

23:23precious metals and take a look at how they're doing right now. But keep an eye as well on what

23:28perhaps we might see play out on that front. Abhishek, if we sort of zoom out for a moment and

23:34look at

23:35the bigger picture and don't focus on today's sell-off, what would be your preferred picks

23:39in the market?

23:42Yeah, like I said, I mean, there is actually a lot of opportunity in the sectors that I just

23:46mentioned. You know, a lot of work happening on the ground in terms of infrastructure, capital goods,

23:56engineering, like you just, you know, the new plant for Micron, right? So there is a lot of

24:02things which are happening in the EMS space. So there are pockets, valuations have tempered off

24:09a bit in the last year, year and a half. So things are looking better. What we really need is

24:16sustenance of good corporate results. I think that's been, you know, one of the areas where

24:22we've seen problems in the past, the last at least year, year and a half. Now for the first,

24:28like I said, you know, after nearly four or five quarters, results have started getting better.

24:34One more quarter and things should, you know, get more bullish.

24:42All right. That does seem to be the general consensus coming through that perhaps another

24:46quarter is what we need to watch out for. Our results this time also have been encouraging,

24:51but just to ensure that they're steady on track and we start to see a further consolidated pickup.

24:56All right. Let's also get you a conversation with Mercedes-Benz. Cafe 3 norms are back in focus

25:03and Merck India is backing tighter fuel efficiency standards, even if they result in higher vehicle

25:09prices. Speaking to business today, MDN CEO Santosh Iyer said the company is aligned with Siam

25:14and stressed that public health must take precedence in policy decisions. He also revealed that Mercedes

25:20Mercedes' upcoming entry-level luxury EV, the CLA powered by Nvidia chips, would deliver computing

25:26power equivalent to four supercomputers, signaling a sharp shift towards software-defined vehicles.

25:34You know, there's been a lot of deliberations and talks going about on the Cafe 3 norms that are

25:39scheduled to go on flow from Quotathon 27. There's also opinion about in the various circles of the

25:44government that, you know, tailpipe emissions should not be considered as a, you know, as a zero

25:48given all benefits. What's your opinion about Cafe 3 norms? Do we see some benefits getting passed out to

25:54small cars versus a higher car? What's your take? See, firstly, we are fully aligned with what the CIM view

25:59is as common as industry. We all came to a common minimum agenda on what should be the kind of

26:05prognosis. I think industry has its own set of challenges. One of the biggest fear is not technology. I think

26:10even

26:10Indian OEMs are really capable to make cars capable to any of the emission of, but it adds cost. We

26:16need to remember that any, for us, we are anyway, not only, you know, Cafe, but even BS7 compliant and

26:23so on and so forth, we are ahead of the curve from the European standard. But when you look at

26:26India as a

26:27car market, the technology has a cost. Is the customer ready to pay the cost? You have already seen the

26:33price sensitivity, you know, what happened after GST? Why did the car market explode? Because the prices

26:37came down. So, the demand is there, but the price is a very big factor. So, we have to be

26:43conscious

26:43about technology adoption and the right balance when it comes to adding the cost to the car and

26:49to the consumer. I think the policy makers are aware. At the same time, public health is super

26:54critical. You cannot, it cannot, there is no cost to a public health crisis, right? And we see in Delhi,

26:59in Pune now, the air quality topics. So, the balanced approach is what we need to do. We are fully

27:04committed as early implementation and we are fully aligned with that CM view. Whether

27:08a certain segment of cars should be given a certain, I think we are not participating in

27:13that segment. So, we don't have that view. But I think policy makers and CM are closely

27:17discussing the way forward. And as I said, this is a balance between cost and one side,

27:23technology on the other side and demand impact because of that as well.

27:26All right, that's why we leave it on the show today. Not a great ending on a Friday evening,

27:32but hopefully the weekend will give markets time to rest, rewind and back to business on Monday.

27:38Thanks so much for watching.

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