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The markets continued to pile on the losses. Weak global cues dented sentiment and thwarted repeated attempts at recovery. Nifty closed at 4,864 down 89 points, while Sensex shut shop at 16,339 down 337 points. Banking, realty, capital goods, midcap and small cap stocks were the biggest losers today.

Ambareesh Baliga of Karvy Stock Broking feels people have totally lost confidence in this market and are not willing to put in fresh funds although valuations are looking extremely decent. He is hopeful that the markets consolidate at these levels.

Excerpts of CNBC-TV18’s exclusive interview with Ambareesh Baliga:

Q: What do you think we are going to see in this series because we have cracked that 5,000 mark quite early?

A: Absolutely, and people seem to have totally lost confidence in this market, at least for the time being. People are not really willing to put in fresh funds even at this point of time although the valuations are looking extremely decent.

Our feeling is that this market should not really break those 16,500 levels very decisively. In case it does, then we could possibly test the lows which we had seen in January again. But we are still hopeful that it should not break the 16,500-17,000 range at least for a while.

Q: Do you sense a lot of selling which is coming in from many quarters or is it just a lack of buying for which the market is falling almost every day?

A: One thing very clearly is lack of buying. But at the same time today, there seems to have been some sort of margin pressures, especially on those midcap stocks where it seems that people are in fact throwing away stocks. This normally happens whenever there are margin calls. So I think there would have been some selective margin calls especially in the midcap stocks.

Q: Have you heard of some buying in the second half of the session because stocks, at least many largecap names, have come off the lows of the day?

A: Surely, there must have been some amount of value buying happening at lower levels, especially for the largecap stocks because, again if you see, these valuations are the cheapest possibly in the last nine-twelve months. I do not think we would have actually seen these sort of valuations especially after the sort of results which we have seen in the last two-three quarters. I think valuations are at the lowest for a time so surely there must have been some value buying happening at these levels, especially from at least the local institutions.

Q: Any specific midcaps on which you are hearing of margin call pressure?

A: We have not heard of any specific stocks on which margin calls are there, but if you see across, couple of them have actually fallen 7-8% for no reason. This clearly shows that these finances would have sold off, and normally these finances don’t really look at fundamentals, so when they throw away stocks, these stocks fall 5-10% in no time. That’s exactly what has happened today.

Q: How much lower do you think we could go by way of pure participation because through these past two series, the volume interest has just been drying up. Do you think it could go a bit lower as well?

A: Yes, in case it breaks these levels decisively, we could see another at least 1000-point fall from here, even that possibly may not take another 3-4 days. So we are just hopeful that it consolidates at these levels. Also, because of the sort of buying which we have seen in the past 15-20 minutes, we are hopeful that the markets will sustain at these levels.

Q: What is the call on ICICI Bank after all the newsflow that has come in today?

A: We were among the very few people who were not that bullish on private sector banks, especially ICICI Bank in the last four-five months. Again, in the past couple of months this rumour or whatever news has come out today, about subprime, was there in the markets because of which we were asking people not to buy ICICI Bank. In fact, at higher levels at around Rs 1,200-1,250, we were asking people to book out.

Q: What is the call on Ranbaxy from these levels of Rs 450, do you see more upside?

A: Yes, there could be some more upside. We have in fact been positive on Ranbaxy ever since it saw those levels of Rs 360-370, we were buyers at those levels.

We see levels of closer to Rs 470-480 and I suppose at those levels, we would be booking profits. We in fact booked some profits in the last three-four days in couple of these pharma stocks, which we have bought at lower levels. So I think if Ranbaxy again goes to Rs 470-480 levels, we will be booking some profits.

Q: How good is the chance of getting back into that 5,050-5,500 range from here or do you think we will face more resistance getting back into that band over the next few days?

A: I think over the next few days will be a bit difficult because for that you really require huge amount of buying happening at these levels which is a bit doubtful, unless of course you have these FIIs coming back in a big way, which is again doubtful.

So you are actually left with LICs and the local funds to support the markets at these levels. Getting back to those levels, if you are talking in the next one month, yes, it’s possible, but the next couple of days it’s going to be a bit difficult.

Q: Give us one word on what is happening with these infrastructure stocks, particularly on JP Associates. Are you hearing any other bad news or is there just so much over ownership that the stocks are getting dumped like this everyday?

A: I think it is again a question of over ownership across most of these stocks, especially infrastructure stocks because of which some of them are getting dumped. If it hurts somewhere else, you start selling stocks where there is over ownership or over weightage in your portfolio. I think that’s what is happening.

But we are still bullish on infrastructure stocks because the visibility for the next at least two-three years is very clear. So at these levels, or if it falls more, one should be looking at buying infrastructure stocks.

Q: How high is interest or participation or enquiries on Reliance Power. That one seems to have gone into a bit of a dull phase even post the bonus issue announcement etc?

A: Yes because basically after this, I don’t think there are any other triggers possible in this stock. So I think it’s just the retail investors who are just still holding on hoping that they will finally make at least some profit at a later date. But I think most of the other people who had basically bought on margin funding have exited. You really won’t see any sort of action in this stock, at least for a while, I think it will keep drifting.

Q: What is retail HNI interest like now? At 16,500 or 16,300 are there enquiries to go out and buy stocks or is the mood still very bad, there are no great enquiries coming in?

A: Mood is quite bad, I would say enquiries are as good as nil. You really need to push people to buy and even after that, if you ask them to put in 2 lakh in the market today, they would possibly come with a cheque of Rs 25,000. That’s the sort of interest which is there in the markets. But then again, in case the markets go up to possibly 21,000-22,000 levels, at that point of time if you tell people to sell, they would possibly come up with the cheque of Rs 2 lakh to invest. That is the psychology of a investor which keeps repeating.

This could be a very good time to buy for long-term, but people prefer to stay out. It’s a wrong time to invest like what we have seen in December, people were coming in hoards and investing.

Q: Any take on Suzlon, have you been keeping an eye on that it has lost nearly 20% in two days?

A: Yes, Suzlon believes in giving shocks every now and then. You had those results two quarters back which actually shocked most of the analysts and now this problem with the blades, which I think will shave off nearly Rs 100 crore from their profits. So I think it is best to ignore this stock at least for a while.

Disclosures: It is safe to assume that my clients & I may have an investment interest in the stocks/sectors discussed.