Mkts close to bottom of current trading range: PL

Sharmila Joshi, Prabhudas Liladhar, feels that the market may be close to the bottom of its current trading range.

Excerpts from CNBC-TV18’s exclusive interview with Sharmila Joshi:

Q: How much worse can markets get from here?

A: That would be really difficult call to take because we are reacting to a whole set of different parameters. We are reacting to a lot of global news in terms of continued bad news that one is getting on the financial sector front from the US, coupled with the crude worries. Then even internally things have not been so great. We have had this breakout of bad news, for instance, on a stock like Ranbaxy and a lot of bad economic data along with not such great corporate numbers.

So, it is very difficult but perhaps we are in a trading range and from that perspective may be we are close to the bottom of the trading range. But as we saw in the last couple of months, we are also making lower trading ranges every month.

For the moment, I would say that we should be close to kind of a bottom of the current trading range that we are in.

Q: Since you spoke about Ranbaxy, which is down 13% currently, what would you be your strategy on the stock? Do you have reasons to believe that the deal will not go through and in that case people should offload or do you think this represents a perfect buying opportunity?

A:  It is somewhere in between because think that there is any evidence so far to suggest that the deal will not go through. At the same time a lot of people who must have bought this stock thinking that they could use the arbitrage opportunity when the open offer comes etc, perhaps one has those kind of traders exiting the stock now thinking that they could enter at lower levels if everything kind of clears up.

We will have to wait for the next move, which would come from Ranbaxy and the kind of response they give. We must also remember that this is something that has been going on from some time. So we should not assume that it was really unknown to Daiichi-Sankyo. So we will have to wait really on what Ranbaxy has to say on this issue.

Q: What about the market reaction to Fitch’s downgrade for the local currency to negative and the concerns of the macroeconomic front? How are you as a market participant reading that?

A: This has been in the news for the last couple of days. We were expecting this to happen. But we will have to wait now, more than ever to track internals and take a view on how we are expecting numbers to be and how we are expecting internal growth to be really more than anything else.

But liquidity has got shot. We have seen that and when you see developments like this, it will mean a further fall in the kind of flows that we see. But much more than that, going forward we will have to re-emphasis and go back to what numbers are going to look like.