Asian mkts not yet bottomed out: Subodh Kumar

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Most of Asian markets are recovering. Subodh Kumar, Chief Investment Strategist of Subodh Kumar & Associates believes that the Asian markets have not yet bottomed out.

He told CNBC-TV18 that if oil prices keep moving higher then the Asian Central Banks have an inflation issue and they will keep tightening.

 

Excerpts from CNBC-TV18's exclusive interview with Subodh Kumar:

 

Q: What is your sense because it seems more like a decoupling from the entire US markets because the kind of losses that they ended with on Friday it's rather surprising this morning that the Asia is actually holding out in the green?

 

A: I think what we have to look at is that the US is just entering into a bear market territory whereas Asia had been weak much earlier in the year as has been Europe. In Asia people are waiting for the Japanese business or Tankan report coming out tomorrow Tuesday, which will discuss the business confidence aspects inside Japan.

 

The other issue I think is the European interest rates would also be discussed on Thursday by the European Central Bank. So what the market is looking for right here is when value-oriented investors might come in and we will watch oil prices but I think that the value-investors would really set the bottom in these markets.

 

Q: Do you think considering that we are very near bear market territory, any cue could make the markets more tense or have the markets in Asia effectively bottomed out?

 

A: No I don't think we can say that they have bottomed out as yet, I think that the sensitivity is that if oil prices keep moving higher then what the Asian Central Banks have is an inflation issue and they will keep tightening. 

 

 

Q: Which sector would you particularly recommend for investors today in Asia?

 

A: I think one has to focus on companies which are adding values and are quality leaders in their sector and are not excessively affected by oil prices. I think that combination of factors favours some of the stronger Infotech companies and maybe some of the pharma companies.