According to him, although the foreign institutional investors have been selling, the domestic investors continue to support the market.
With the upcoming Fed meeting in June, the probability of an interest rate hike by the US Central Bank has moved up from 4 to 34 percent but it is still below 50 percent, said Bhat. So, it is unlikely that the Fed will hike in June but could hike a couple of times post that till December.
Globally, on the newsfront, Japan and China are stable; there is no bad news from Europe. Even if the US Fed hikes rates, the Indian equity market may correct but not substantially, he said.
He likes medium private sector banks, FMCG and economic turnaround sectors.
Pharma, he says, has been beaten out of shape but thinks could turn for the good going forward.
He does not advice buying into public sector banks but says the market seems confident of a turnaround in them.
Meanwhile, with the probability of GST becoming a reality soon, one could see a dramatic change in the whole structure of Indian industry, said Bhat.
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