Ambareesh Baliga of Karvy Stock Broking said today we are in a situation, where in case the market goes down further from here, then we are in a confirmed sort of bear market.
"It is time that you get aid from external agencies, possibly the law makers need to come out and make some policy announcements, which will actually help the equity markets. You really cannot expect the investors to come in and start investing at this point of time because basically the sentiment has been hurt so badly that I really do not think we can recover very soon," he told CNBC-TV18.
Excerpts from CNBC-TV18’s exclusive interview with Ambareesh Baliga:
Q: What do you sense is happening about 20 minutes to go before we wrap up trade? Are we are coming off quite substantially?
A: Absolutely. People who possibly bought in the morning or yesterday in that major fall possibly could be also booking profits at this point of time.
Q: How do you think this sets us up for trade tomorrow?
A: In case, we have a 75 bps cut or possibly 100 bps cut, we could see the international markets possibly moving up a bit more from where we left it. So, because of that we could see the markets possibly opening better tomorrow.
Q: What happened most of today?
A: Surely it was mostly short covering. At the same time, there must have been some nibbling done by the local mutual funds because quite a few of them are actually sitting on cash.
So, at these levels, there is surely some amount of nibbling happening. But again, there is no serious buying happening, which really will not help sustain the markets at higher levels.
Q: What is happening with some of these banking stocks?
A: It is basically sentiment. The sentiment has been hurt worse than the market. Overall, as far as the banking sector and the financial services sector is concerned, it is especially because of subprime and whatever has happened as far as ICICI Bank is concerned. So, people are extremely cautious.
If you see from the valuation angle, most of them are at extremely cheap valuations; especially some of these private sector banks and stocks like Yes Bank which has come down. But then, you cannot touch them at these levels. If you wait for either week or ten days, you may possibly get it cheaper.
Q: What is your sense of how bad or sour the mood has gotten after yesterday’s performance for the market amongst the retail HNI clientele?
A: In January, we saw panic. But today we see more disgust against the markets. People just do not want to look at the markets and do not want to put in any money at this point of time. Whatever they have put in the last three-four weeks or investments that have been made, everything has incurred a loss for most of the people. So, it is just disgust that people do not want to look at the markets.
Some of them are in fact even looking at exiting at a loss. So, we are in a situation today where in case the market goes down further from here, then we are in a confirmed sort of bear market.
At this point of time, it is time that you get aid from external agencies; possibly the law makers need to come out and make some policy announcements which will actually help the equity markets. Otherwise, you really cannot expect the investors to come in and start investing at this point of time. Basically, the sentiment has been hurt so badly that I really do not think we can recover very soon.
Q: Do you sense though that there is still some kind of margin issue or collateral issue for some of the HNIs on many liquid stocks?
A: A margin issue, which was not there fifteen days back, can surely come up because the whole thing depends on the prices. In case the prices keep going down, you will keep having margin issues at every fall. Someone who was possibly strong at 17,000 levels need not be strong at these levels.
Disclosures:
It is safe to assume that my clients and I may have an interest in the stocks/sectors discussed.
Source : MoneyControl
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