"Markets are going to have period of consolidation," he said. "If the risk premiums go up in emerging markets, there could be flight to safety. I don't believe that issues in China are sorted out."
However, Mr Sreesankar is positive on select midcaps. He said Jubilant Life Sciences, JK Lakshmi Cement, VRL Logistics, Capital First and VA Tech Wabag are some his top picks in the midcap space. J&K Bank is the only banking stock he likes in the mid-cap space.
Outlook on Metal And Banking Stocks
Metal stocks have been one of the big outperformers in the past two months, boosted by a rally in global commodity prices. But Mr Sreesankar does not think that the gains in metal stocks are "sustainable".
If the economy starts to pick up, investors should start accumulating banking stocks such as ICICI Bank and Axis Bank, which have been weighed down on concerns over bad loans, he said.
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