Fortune Fin says uncertainty will continue, suggests buys

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Fortune Fin says uncertainty will continue, suggests buys

Abhijit Chakraborty of Fortune Financial feels that the scare is not over yet. "These are issues that take time—they can’t be solved in a matter of a quarter. These are very large issues and there are agencies and governments involved in trying to mitigate the impact of it."

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SIGNS OF European market recovery are likely to boost sentiments and push bourses across the world to old highs. However, the scenario remains unpredictable, with volatility and confusion written all over the screen.

Abhijit Chakraborty of Fortune Financial too feels that the scare is not over yet. "These are issues that take time-they can't be solved in a matter of a quarter. These are very large issues and there are agencies and governments involved in trying to mitigate the impact of it." And, the impact of it, he says, will be known only after a substantial period of time. "During this entire period, the market will tend to have an element of uncertainty."

He suggests investors to buy protection in the portfolio. "Also, you have to be very sure about the companies that you are investing in," he says adding that it is safer to invest in domestic companies, where earnings positions are more stable and valuation are in your favour.

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

Q: Are we heading back to 5,300-5,400 or you cannot be sure with so much volatility?

A: I think this is a classic case of reflexology when the market movement is determining the perception about the real economy and the real issues. For a couple of days the markets dip and we are all skeptical and when it goes up we think things are behind us, I don't think it is going to be so easy.

What is going to happen is that this entire issue in the Europe as well as the fact that China could be slowing down along with the US-all these global issue cannot be over in a quarter or a month's time. I think these are very large issues and there are agencies and governments involved in trying to mitigate the impact of it. So I think it is going to be a long drawn affair. Whatever the impact of it is going to be, positive or negative, is going to be realised and known only after a substantial period of time. During this entire period when we are yet to know what outcome of this crisis is going to be market will tend to have an element of uncertainty.

Having said that, the markets, worldwide and in India, have held up very well and that is because there is a difference in this particular crisis compared to 2008-the entire world economy including India are on an upswing right now as far as all economic parameters are concerned.

The biggest thing is that investors have been skeptical about these global issues for quite some time. So there hasn't been a situation where everybody is invested to the hilt and valuations are not flawy. All these factors have enabled the market to withstand the global negative sentiment and within that India has relatively performed much better than most of the other countries and that is because we are better positioned. But we cannot rule out the uncertainty and therefore we should not be too gung-ho and talk too bullish right now.