BlackStone says mkts to remain rangebound; suggests buys

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Punita Kumar Sinha, senior managing director of The BlackStone Group expects markets to remain rangebound on the back of global uncertainty. "The markets are volatile on negative economic data and strong earnings."

Commenting on the Indian market, Sinha says India is one of the better performing Asian markets this year. "India is witnessing more flows than other larger Asian markets."  However, she says money may move out of India if more allocated to China and Hong Kong.

On the European turmoil, Sinha believes we haven't seen the end of negative newsflow from Eurozone. She thinks the region needs more austerity measures. "Europe is likely to see volatile times ahead," she warns.

Commenting on her sector picks, Sinha gives thumbs-up to autos, consumer discretionary along with a slight overweight on technology and financials. However, she is underweight on telecom space.

Below is a verbatim transcript of the interview. Also watch the video.

Q: Last we spoke your view was that we are still in a range bound situation but the market could improve in the second half of 2010. Do you still hold that view?

A: I do think that the markets are likely to continue to be rangebound at the broad index level but if you look earlier this year I had mentioned that the markets will remain volatile and from January we could see the lows of January or February being broken and we could go down further and we can also go up further from the January highs.

We have broadly seen that. The markets will remain volatile until there is clear data pointing to whether there is recovery or a double dip. Right now there is a lot of confusion. One day we see at least in the US poor consumer confidence numbers another day we see good earnings from companies. So while the earnings from companies are being coming out generally good the macro data globally has not been that positive. So that is what is causing the market to remain range bound.
 
Q: For us, do you think it is a possibility that when we emerge from this range in the second half, we could be headed to a fresh high sometime later this year or earlier next year-is it possible?

A: When you look at the Indian market, you have to stop just looking at indices because while indices this year have been up very little, if you look at number of midcap stocks they are up 20-40%. So India is much bigger market than just restricting to discussing the market just at the index level. So a number of stocks have hit new highs this year. It is a very stock specific market and I do think the conditions in India are fairly robust in terms of both growth and improvement in government finances and earnings as well.

I do think select stocks will continue to do well. I do not know the necessarily translates in index going up or now. I suspect index will be drive by the constituents of the index itself.