Portfolio Manager PN Vijay said investors are focusing on issues within India. “People are very concerned whether the strong growth that we have been witnessing is a thing of the past. There the jury isn’t really out because the last inflation figure was quite tough and some of the GDP numbers have been rather soft.”
Vijay feels there is going to be an explosive move in the next 10-days. “Two key events will determine whether there is an explosive move on either side. If inflation continues at something above 6% for the next 3-4 weeks, the market is going to be in pretty deep trouble for a few months. On the other hand, if inflation does soften to about 5-5.5% by April end due to the base effect and some of the commodity prices softening, including agriculture, then we will take-off.”
Excerpts from CNBC-TV18’s exclusive interview with PN Vijay:
Q: There is very little interest in the market so such lack-luster kind of trading sessions?
A: Today was a day, which won’t be remembered for sometime. The market is trying to come to terms with several things, most of these are related to local factors. The Indian markets were dancing to global tunes in January-February. But in March, people are focusing on the issues within India. FII selling has abated; they have been either small buyers or sellers. But people are very concerned whether the strong growth that we have been witnessing is a thing of the past.
There the jury isn’t really out because the last inflation figure was quite tough and some of the GDP numbers have been rather soft. People are still trying to come to terms whether the India dream, as some investment banker put it, that the miracle is turning into a myth.
So, the market is trying to come to terms with that. So, I am not surprised that people are not going out and getting wet out there but sitting back and churning over things.
Q: Do you think this kind of a grind can continue for longer than what most people expect, this small range kind of trade with low volumes, persisting for even a few more weeks and months?
A: No, in terminology of chartist trends we are into a wedge and wedges breakdown either on the upside or downside. Two key events will determine whether there is an explosive move on either side. I am sure there is going to be an explosive move. If inflation continues at something above 6% for the next 3-4 weeks, the market is going to be in pretty deep trouble for a few months. On the other hand, if inflation does soften to about 5-5.5% by April end due to the base effect and some of the commodity prices softening, including agriculture, then we will take-off.
People are discounting corporate results a wee bit. They all know that there could be some softening especially in capital goods etc. If the corporate results are not as bad as current pessimism is that could also have a positive influence. So, inflation is key and secondly corporate performance. There is going to be an explosive move in the next 10-days.
Source: Moneycontrol.com
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment