Commenting on the upcoming NSE IPO, market expert Neeraj Dewan said the market could witness a temporary correction in BSE shares as investors reassess valuations and speculate about the likely pricing of the NSE issue.
“I feel that in the short term, there may be some correction in BSE. Investors may price in concerns that the stock is already expensive while trying to estimate the valuation at which NSE will come to the market,” he said.
Created with AI. Errors are possibleNSE IPO and Impact on BSE
“If BSE corrects by around 10-15%, that could be an opportunity. The speculation will remain until the NSE issue opens and pricing becomes clear. After that, if NSE sees strong demand and a successful listing, money is likely to flow back into BSE as well,” he said.
“There is enough demand for capital market-related plays. We’ve seen strong investor interest across listed brokerages and other market infrastructure businesses. Mutual fund-related stocks have also delivered impressive returns over the last one-and-a-half years,” he noted.
According to Dewan, while some short-term money may move towards NSE ahead of the IPO, any weakness in BSE should be viewed as a potential accumulation opportunity, supported by the exchange’s improving trading volumes and growing futures and options business.
“The initial reaction may create some volatility, but BSE’s improving fundamentals and growing derivatives franchise should continue to support investor interest over the longer term,” he added.
Oil price easing boosts market outlook; financials, defence remain top bets
Oil prices remain the biggest factor influencing foreign investor sentiment towards India, and their recent decline has significantly improved the market outlook, according to market expert Neeraj Dewan.
Speaking to ET Now, Dewan said that lower crude prices have eased one of the key concerns weighing on foreign institutional investors (FIIs), adding that oil could decline further if geopolitical tensions in the Middle East remain under control.
“Oil was the biggest worry for us and perhaps one of the reasons why FIIs were not looking at India. Now that oil has corrected considerably, we are already at a much better level. If the situation in the Middle East remains stable, prices may soften further,” he said.
Dewan noted that investors have been steadily accumulating quality stocks over the past few days despite uncertainty, as market turning points are difficult to predict. He said the strategy has already started yielding returns, particularly in sectors that had undergone consolidation after the sharp correction witnessed in March.
Among his preferred sectors, Dewan highlighted financials as one of the most attractive opportunities in the current market environment.
“Financials is one sector where we have accumulated and are already seeing returns. Opportunities continue to exist there and investors are likely to keep finding attractive entry points,” he said.
He also remained positive on defence stocks, stating that the sector has resumed its upward trajectory after a period of consolidation. For long-term investors, he believes there is still substantial growth potential in the space.
Apart from defence, Dewan is constructive on broader India growth themes such as railways and infrastructure, where he believes valuations remain reasonable despite recent gains.
While maintaining a positive outlook, he cautioned that market volatility could persist as investors closely monitor inflation data in India and the US, along with developments related to interest rates and global economic conditions.
“News flows and macroeconomic events will continue to create opportunities. Investors with a one-to-two-year horizon are likely to get several chances to accumulate quality stocks over the next few months,” he said.
