As far as the markets are concerned and the economy is concerned, we have to de-link the two because in the past we have seen that the economic changes are not reflected in the markets while on the way up and while on the way down is the word coming in from Vinit Sambre, head of equities, DSP Investment Managers.

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According to him, the market to some extent has swung more because of the poor sentiment. Definitely, there is an economic impact but whenever the market moves, the pendulum tends to swing at excessive zones at both ends, he said in an interaction with CNBC-TV18 while discussing the market outlook.

When asked about the pharmaceutical sector, he said they have been overweight across healthcare funds. In healthcare, in terms of prioritisation, we have chosen few businesses which we like for a longer-term outlook. Speaking about there large holding in IPCA in the healthcare fund, he said, API for Chloroquine getting approved by USFDA is good for the stock. "Generally we believe that these are companies where they have very strong fundamentals, they have emerged from a very bad patch in the past few years because of the USFDA problem. Hopefully we see the sector having long-term outlook to be good," he added.

"We see that there is a multi-year opportunity for these sectors and what we need to do is pick some of the companies where the balancesheets are strong, they are run by the good management and they have a very decent capital efficiency factor,” said Sambre, adding that given what is happening globally, demand is going to be there for healthcare products and hopefully, that will work positively.

With regards to banks, he said, “Banking is a leveraged business. On one equity, you have several leverage, so any derailment of any of your asset has a multiplier impact and which is where today overall caution has to be exercised for the sector."

The choice of banks keeps getting narrower given the fact that there are new issues emerging with some of the well-established players as well, he said, adding that they have been slightly cautious in terms of the current environment. "We are trying to be very selective in terms of which ones to own and which ones to ignore,” he further mentioned.