Jun 10, 2013, 10.27 AM IST
The rupee weakness is likely to pull the Nifty down, but this should be used as a buying oppurtunity recommends Mehraboon Irani,
In an interview to CNBC-TV18, Mehraboon Irani, principal and head- Pvt Client Group, Nirmal Bang Securities says the Indian equity market is likely to see a correction given the rupee downward trajectory.
However, Irani is optimistic towards the market and says investors should wait and look out for good buying on dips opportunities.
Below is the edited transcript of Irani's views on the market.
The fact that gold has rebounded and the oil is now nearly at its three-week high is also a matter of a little bit of concern looking at what has happened to the currency. Besides improving deltas, as far as India is concerned, we need to accept the fact that the market is driven largely by liquidity. Any sign of a stimulus withdrawal is having its impact.
I believe we are at the cusp of a new economic cycle. Though these are early days, but we are there. We feel the market could continue to come down little bit more, because a large part of the positive feeling has got negated by what has happened to the currency right now. So, we will possibly have to wait on the side and look out for opportunities again in buying into select stocks.
The problem in the Indian stock market is that the same stocks continue to remain attractive. They become expensive and people will have to wait for it to come down. The fact is nothing is happening as far as top-line and bottom-line of those companies goes. So, it is like the market has become completely polarised as far as selection of stocks goes.
Honestly, the compass remains the same. Not many stocks are getting added to what one can buy, but for the time-being investors should be waiting for declines to buy selectively into good quality stocks for the longer term. This is because in the short-term, we feel that the rupee will continue to play a major role as far as the market goes. Coming June 17, what Reserve Bank of India (RBI) does is also very important. The only factor which is going in favour of a rate cut right now is the beginning of the monsoon season which has started on a very good note. But we will have to keep our fingers crossed as far as the current account deficit (CAD) and index of industrial production (IIP) numbers are concerned.
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