It is sea of red all across Asia and the stocks there have slumped sending the regions benchmark Index to the lowest level in four years. Nimeesha Takalkar, Equity Research Asia at Julius Baer says although there could be rate cuts in India to tackle liquidity issues, they will not be a huge impetus to equity markets. The pressure still remains on the downside said Takalkar.

Here is a verbatim transcript of the interview with Nimeesha Takalka ron CNBC TV-18. Also see the accompanying video.

Q: Your opinion on the Asian markets, a complete tumble coming in there adding to that the woes of commodities, what’s your take on Asia today?

A: We are not surprised if we see these kinds of corrections because corrections are across the world and now across asset classes. Where do we head from here is the important question and that is going to be answered as more information on to how deep and broad the recession is comes through.

Particularly on India, we would like to see whether the Capex cycle can continue even after a small pause or is this going to be a huge derailment. I think that will be a critical question in deciding how much of the topline growth can be maintained and what kind of margin compressions we would see in future. As things stand right now, we feel that the topline should see some revision downward in estimates, and the uncertainty factor might actually see discounting factors go up. Therefore we feel that the pressure could be further on the downside.

Q: Do you see again a series of rate cuts; remember that an October 29 meeting is scheduled?

A: Yes they might come through. The way situation is right now, liquidity is still a major concern but whether we see this as a huge impetus for the equity markets, probably not. I do believe that he pressure still remains on the downside.