Since Feb 2022, the global markets are seeing a downtrend on back uncertainty due to Ukraine-Russia Conflict, Crude Oil Price Rise, Increased Inflation, and Continued Disruption Linked to Semiconductor Components, among others.
The Nifty 50 has fallen by about ~6% with more pain in the offing owing to interest rate hikes and cut back on private spending.
Now, coming to the question,
Does this correction provide an opportunity to buy quality stocks?
The answer is YES
Let us look at some of the potentials that have taken a secular fall with the market but are set to bounce back in the coming years.
The most ridiculed stock in the Indian Stock Market that missed rally after rally is set to bloom owing to the diversification in the business and the company’s vision to not be dependent on one specific area for its major revenues
Among all the PSU Banks, SBI has come out as a champion after merger and restructuring. In line with the Govt’s aim to reduce PSU Banks, SBI is set to be omnipresent as a lead banker to the government and the nation. Its focus to reduce NPA’s and focus on profitability is set to see further dividends for shareholders.
A good dividend-paying PSU is in focus owing to the coal crisis in India. The Ukraine-Russia war has highlighted that dependency on fossil fuels like coal, natural gas, and crude oil is not set to go away in this decade for sure. Countries around the world are buying coal at a 150–200% markup in order to meet their requirements. Considering the monopoly position of CIL, it is hard to ignore the stock and its function.
With the softening of global demand especially led by China, the stock has reacted like its peers by following a downward spiral. Despite this, the company will outperform its peers on the back of superior operations and pricing power
After being the darling of investors during the pandemic, IT and ITeS stocks are getting hammered around the world on back of lower growth, missed expectations, etc. Wipro has been an outlier among the IT Giants led by TCS and Infosys. It has been able to beat expectations and up its game without much fanfare. It is certainly a stock to be picked during the correction.
With CLSA raising its stance to positive for the Auto Sector owing to lower input cost in terms of metals used, M&M along with peers is set to gain. The company already have some unique offering in the SUV Space which will get amplified with the electrification drive. Also, the company’s presence in the tractor space makes it attractive.
Kindly do your due diligence prior to investing. Also, do not invest under speculation or with hopes of making quick returns.
Hope this helps
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Happy Investing!!
References:
Lateral Thinking 