Narrative on recession and inflation will probably ease out in next few days: Daljeet Singh Kohli

“While Q1 numbers in India as well as in the US showed a pressure on margins but at least the top line is maintained. So now the key thing to watch out for is whether this top line was maintained because of pent up demand or was it because there is an inherent consistent demand which will continue over next few quarters,” says Daljeet Singh Kohli, CIO, Stockaxis.com

Where do you see markets going from here on?
I think the market has shown very good resilience in July and in the first 15 days of August also we are seeing that momentum continue. First sign of it came when the market started ignoring the negative news. Last time when we spoke, we were discussing Nancy Pelosi’s visit to Taiwan and people were worried about what will happen vis-a-vis China and that day itself, the market moved up.

That shows that probably the market is now more inclined towards the revival of the economy and all of those things and this narrative about recession and inflation will probably ease out in the next few days. In any case, the base effect of inflation will start playing from next month onwards. We will stop listening to a lot of inflation numbers and all of that and I guess the market is building on that, trying to move ahead.

But the good part is that while Q1 numbers in India as well as in the US showed a pressure on margins but at least the top line is maintained. So now the key thing to watch out for is whether this top line was maintained because of pent up demand or was it because there is an inherent consistent demand which will continue over next few quarters.

That would be the key thing to watch out for in September quarter numbers when we meet in October. At that time, we will see what is the situation on that front. Margin pressure is there probably. It will take another one or two quarters to lease out and in between, from now till that period, markets will probably keep on. There is no one-way movement. We are not expecting that we will be only on the uphill path. I think that should be behind now.