Sheshadri Bharatan of Dawnay Day AV Financial Services said investors should look at some frontline stocks and try and enter the market at this point of time. He however cautioned that the markets have not bottomed out. “We might have some more pain left in the market. The uncertainty continues and we will have to wait for the earnings results,” he told CNBC-TV18.
Excerpts from CNBC-TV18’s exclusive interview with Sheshadri Bharatan:
Q: What do you make of this cool off in the broader market because just when we are seeing some sort of quietness coming in on global equities, there is pressure that we again need to deal with, which is primarily our own?
A: Yes, the uncertainty continues despite the markets opening with a positive gap. The tussle between bulls and bears continues. The market is taking cues from global markets. News agencies have reported that Credit Suisse has warned of losses. Even hedge fund Monsoon Capital had to book losses across their global portfolio. We are expecting this week’s newsflow to impact the Indian markets.
Q: What advice have you given to your customers? What is the advice to a trading client and investor?
A: For trading clients, I don’t think there is too much of things left in the market. At this point of time, they are mostly exercising option strategies etc. For investors, we are suggesting that they look at some frontline stocks and try and enter the market at this point of time. However, the markets have not bottomed out. We might have some more pain left in the market. The uncertainty continues and we will have to wait for the earnings results. We expect that there might be some positives sentiment in the market.
Q: How are you looking at the broader market space at this point in time because we are looking at liquid stocks seeing a lot of cuts coming in on a day-to-day performance? On the F&O side also, pressure is building up on these stocks? How are you advising people who have exposure to these leverage counters to play it now?
A: On the F&O side, Wednesday saw shorts being rolled over while Tuesday saw the longs being rolled over. The sentiment that we are getting from market is that bulls are picking up enough coverage and rolling over their April positions. Private sector banks and real estate sector have been battered down. Selectively, clients have picked up some FMCG and pharmaceuticals stocks.
Q: What's your buy list?
A: It is all frontline stocks like Reliance Industries, Ranbaxy in pharmaceuticals, and HUL in FMCG among others.
Q: What kind of lows are you looking at for the Sensex?
A: It is difficult guess for anybody in this market. In a worst-case scenario, we might see somewhere around 14,000-14,500. Around this level, the market should see some buying happening.
Q: You believe that 14,000 is the intermediate bottom that the market would have seen and we are not going to go any lower than that?
A: At this point of time, yes till we see earnings. If one looks at the overall picture in the market, inflation is at all-time high and industrial production is down. There is cause of worry but let us look at the set of earnings, which should give a lot of relief to the markets.
Source: Moneycontrol.com
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