It is a sea of green across Asian markets after yesterday’s slam down that most of these markets experienced.Stephan Davis, CEO of Javelin Wealth Management believes that the overall outlook for the markets, if one takes more than a 24 hour view is pretty grim. The rally seen in Asian markets today is a an outcome of short covering plus a bit of buying interest following rather oversold positions earlier on in the week, said Davis.

Here is a verbatim transcript of the interview with Stephen Davis on CNBC TV-18. Also see the accompanying video.

Q: What is the sense that you are getting right now? Is it primarily a short covering led rally at this point in time or are people genuinely stepping in to buy stocks which show value?

A: I think it is very much more a degree of short covering plus slight bit of buying interest following rather oversold positions earlier on in the week. This mornings rebound is not nearly as strong as one might have expected it given the sharp bounces that we saw in the US overnight.

Q: Coming to sector specific action, which are your picks for today in Asia and which sectors would you avoid?

A: My continued stance remains to pretty much avoid all of them, we remain very light on equity and I see no reason to change that view. We still remain extremely cautious and are still maintaining very high cash positions. We feel this is a short-term rally which is not going to last.

Q: Would even energy stocks qualify for that?

A: Yes. I think there is a degree of buying interest in the things like energy and utility and so forth, on the basis that they are modest defensive plays but the overall outlook for the markets if you take more than a 24 hour view is pretty grim.