Looking at domestic flows, peak pessimism hasn't reached yet: ICICI Sec CIO

'Foreign institutional investment (FII) is expected to reverse when these macro headwinds stabilise for a few months'

The price-to-earnings (P/E) ratio has seen sharp contraction, which warrants investments from a long-term perspective, says Piyush Garg, chief investment officer, ICICI Securities. In conversation with Sundar Sethuraman, Garg says stocks in sectors like consumer discretionary, fast-moving consumer goods (FMCG), automotive (auto), and cement have reached attractive valuations. Edited excerpts:

Are you more inclined to buy now as valuations have come off highs? Or will you await further correction?

Nifty’s one-year forward P/E was 23x when the index made a high of 18,600 in October 2021. While the market fell, earnings continued to revive. This led to a contraction in