Professional investor Sangeeta Purushottam suggests market participants to be cautious as the market is likely to be volatile this year. Global liquidity risk and domestic political risks are likely to prevent the market from a runaway rally, she said.
"The upside for the market from the current levels is limited. The broad range of the market in the near-term is between 5556 and 6000-6100 on the upside, she told CNBC-TV18.
Meanwhile, she expects the Reserve Bank of India (RBI) to cut repo rate by 25 basis points on May 3.
Below is the verbatim transcript of her interview on CNBC-TV18
Q: What do you think? We have had quite a powerful pullback over the last few days. Do you see more upside or would you draw the line here?
A: We need to be a little cautious here. I expect the upside from here to be limited. To my mind the broad range of the market to work with in the near-term is between 5556 levels that we saw and 6000-6100 on the upside. The news flow is mixed. We are definitely seeing macros improving, so that provides a certain floor to the market. At the same time, global risks like liquidity risks, political risks remain, so that is going to prevent this market from being a runaway market.
If the political scenario was clearer, the global environment were a little more stable then one could argue that this is a great time to start buying for the long-term, because this would be the base forming year, but it is likely to be a fairly choppy year because of these factors.
Q: Can the process of bottoming out now start for the technology stocks or do you think there is still some downside there?
A: Technology is going to be a mixed bag. For some of the companies there could still be some pain left as we go along. One of the factors which was favouring the technology sector was the concerns about a depreciating rupee, if that starts to diminish with the improving macros and that becomes an additional negative along with some concerns on growth.
It is hard to paint the whole sector with the same brush, so it is going to be a very mixed bag and very company specific.
Q: What are your expectations from Reserve Bank of India (RBI) policy next week?
A: I am looking at 25 basis points (bps) rate cut, it is really hard to make case for 50 bps, because although we have seen inflation numbers come off, which is really encouraging but in absolute terms it is still not where we should be. So given that, I do not see the RBI taking a very aggressive stand and it will be a calibrated reduction.
Q: Any thoughts on the big aviation deal that got consummated yesterday? Would start looking at some of these aviation stocks afresh?
A: I see the Jet-Etihad deal as positive for the sector and definitely positive for Jet Airways. It does open up the possibility of more deals happening, particularly with AirAsia and then Etihad funding coming in. That can keep interest in the sector alive but it also means that the competitive intensity is increasing as we go forward because there will be stronger participants in the sector. So, one really needs to balance the two out.
Once a deal happens, the stock likely to go through a period of consolidation.
Q: Lot of the autos are reporting today. What would be your pecking order in that space?
A: I expect the four wheeler companies to do better. Maruti Suzuki aided more by margin expansion rather than sales growth is expected to come out with good numbers. The weakest in that pack might end up being Tata Motors because of what is happening on the domestic side of their business, which is still to bottom out. So that would be broadly how I would classify it.