In an exclusive interview with CNBC-TV18, Ambareesh Baliga of Karvy Stock Broking, speaks about the markets and gives his outlook going forward.
Baliga says that the markets may not have a deep correction. However, he adds, a correction of 5-8% is expected.
On that 5-8% correction, he advises investors to buy infrastructure, power ancillaries, capital goods and banking stocks. "I think one should look at capital goods stocks like BHEL , L&T . SBI closer to Rs 1,975-2000 is a good buy."
However, he says, one should avoid sectors like realty and auto even at lower levels. "Realty will go through a downtrend over the next at least six-nine months. Autos sector needs to correct at least around 20% from the current levels to make it a good buy."
Below is a verbatim transcript of the interview. Also watch the video.
Q: What have you made of the entire global situation and how much more of a downtrend you think our markets will see from here on?
A: Global situation was known for a quite a while, but we are just hoping against hope that things won't blow out. I think it was a similar situation when we had the sub-prime issue that we knew it for nearly six months, but only when it blew out that the markets started reacting and correcting. So I think a similar situation will happen now. Although we may not have a deep correction, but surely we will have a correction to the extent of 5-8% from here.
Q: So 5% from current levels or do you reckon the market could actually drift significantly lower?
A: Initially we are looking at those levels around 4,700-4,800, which is approximately around 5-8% from the current levels. But depending on the technical situation, at that point of time, it is possible that the markets can even go down further, but fundamentally the markets would be full valued at those levels of around 4,700-4,800.
Q: What do you do with some of the oil marketing companies this morning?
A: I think they would be the only bright spots in the market today but only short-term, you could see some sort of an uptick, but it should be utilised by to exit than trade in these stocks at the moment.
